Recent Policy Studies

• Crime, Justice & the Law
  

  Public-Private Partnerships for Corrections in California

  By Leonard Gilroy, Adam Summers, Anthony Randazzo, Reason Foundation
  
  Policy Study, 04/08/2010
  

  With a correctional system strained by severe overcrowding, a state fiscal crisis and a recent federal order to reduce the prison population by over 40,000 inmates, there are no silver bullet solutions to California’s prison crisis. Even if a combination of early releases, home detention of low-risk inmates and changes to sentencing and parole rules could allow the state to achieve compliance with the federal order in the short term, there would still be major capacity needs over the long term, as the state would still be operating at 137% of prison system design capacity. Public-private partnerships (PPPs) offer a powerful policy option as part of a comprehensive strategy to address California’s corrections crisis. Soliciting and implementing PPPs would give policymakers a powerful tool to lower prison operating costs and deliver additional inmate beds to address the severe overcrowding seen today in state prisons.

  
  
  
• Budget & Taxation
  

  Wishful Thinking About Tax Burdens in Ohio

  By Mark Robyn, Rob Shrum, Tax Foundation
  
  Fiscal Facts, 04/08/2010
  

  State officials in Ohio have steadily engaged in a propaganda effort to claim that the state’s tax system is non-distortionary and the burden on its taxpayers is low. But this conclusion is based upon misuse of data provided by organizations like the FTA whose own data sources warn against their flawed methodology. The reality is that all reliable evidence tells Ohioans that they’re more heavily taxed at the state-local level than the residents of most states. In 2008 their state and local tax burden was 18th highest on a per capita basis and 7th as a percentage of income. The state ranks very poorly on our State Business Tax Climate Index. Levin and his supporters may want to believe that Ohio is America’s best kept secret for low taxes, but it ain’t so. To earn such bragging rights, state officials need to acknowledge the position they are in and work for lower tax burdens and a sounder tax system that does not distort economic decisions.

  
  
  
• Transportation/Infrastructure
  

  Sharing the Burden of Water Supply Protection

  By Carolyn A. Dehring, Craig A. Depken II, Cato Institute
  
  Regulation, 04/08/2010
  

  While a perception that there is a “point of no return” after which water quality is permanently damaged seems to dominate the political and philosophical debate, it is far from obvious that legislative solutions provide equitable or efficient solutions to ecosystem management and protection. Perhaps the empirical evidence from Buncombe County and the political machinations that were undertaken pertaining to the Ivy Creek watershed can provide a warning about the economic impact of such policies and the potential politicization of the process, which often runs counter to efficient economic policy.

  
  
  
• Information Technology
  

  Network Neutrality or Internet Innovation?

  By Christopher S. Yoo, Cato Institute
  
  Regulation, 04/08/2010
  

  It is all too easy to forget that the Internet is not a monolith with a brooding omnipresence overseeing the entire system. Instead, it is a collection of autonomous systems that determine the terms of interconnection between them through a series of arms-length negotiations. Given the Internet’s essence as a network of networks, it should come as no surprise that no two packets will pay the same amount for the same service. Although many observers reflexively view such deviations from the status quo with suspicion, in many (if not most) cases, they represent nothing more than the natural evolution of a network trying to respond to an ever-growing diversity of customer demands. Imposing regulation that would thwart such developments threatens to increase costs and discourage investment in ways that ultimately work to the detriment of the consumers that such regulation is ostensibly designed to protect.

  
  
  
• Crime, Justice & the Law
  

  The Prisoners’ (Plea Bargain) Dilemma

  By Oren Bar-Gill, Omri Ben-Shahar, Cato Institute
  
  Regulation, 04/08/2010
  

  Here the argument is raised that plea bargains do not always represent improved choice for defendants, but rather a coordination trap. Without plea bargains, many defendants would not face the risk of trial; they might not be charged at all. Defendants are charged, and are threatened with trials, only because the prosecutor expects them to plea; they would not have been charged otherwise. Our analysis therefore qualifies one prominent argument in favor of plea bargains, which rests on the logic that it makes everyone better off.

  
  
  
• Transportation/Infrastructure
  

  A Hidden Gift to Manufacturing

  By Roderick M. Hills Jr., David Schleicher, Cato Institute
  
  Regulation, 04/08/2010
  

  The simplest solution to the problem of noncumulative zoning is to make such zones cumulative by permitting within them all uses less noxious than industry. Land markets are hardly perfect mechanisms for allocating parcels among competing uses for land. Noncumulative zones, however, are highly unlikely to outperform even imperfect markets. As methods for abating nuisance lawsuits, such zones go far beyond what is necessary to preserve the rational expectations of industrial users. As mechanisms for subsidizing the industrial users’ costs of acquiring land, such zoning imposes extraordinary deadweight losses — primarily elimination of housing opportunities — while making no effort to target the cost reduction to those very specific industries that are likely to generate spillover benefits for the city or region. The energy invested in the defense of noncumulative zones by urban planners and city politicians would be more wisely devoted to improving the municipal system of taxation so that cities would have revenue to do precisely what noncumulative zones do so crudely — retain industry that actually generates benefits worth subsidizing.

  
  
  
• Regulation & Deregulation
  

  Malfeasance, Misappropriation, Manipulation—or Not?

  By Richard A. Booth, Cato Institute
  
  Regulation, 04/08/2010
  

  Stock options are the primary form of compensation for chief executive officers because they are the best way to align the interests of CEOs with those of diversified stockholders. Nevertheless, critics argue that the use of stock options leads to excessive pay because there is no effective bargaining between the CEO and the board of directors about the number of options to award. It appears that complaints about executive pay are based largely on ex post results but given the distinct advantages of options as compared to other forms of incentive compensation it seems the way to go. From an ex ante perspective, investors are not likely to object to options, because with options the CEO gains only if and to the extent stockholders gain. It is ironic — indeed hypocritical — that pay critics have focused on options when for years the worry has been about the separation of ownership from control. But the complaints proceed from an outdated view of outside stockholders as the sole owners of a corporation. From this perspective, stockholders see options as diluting their returns. The better view however is that a corporation is owned jointly by traditional outside stockholders and a newer breed of inside officer stockholders. If one thinks of the corporation in terms of this two-owner model, many of the common objections to stock options disappear.

  
  
  
• Crime, Justice & the Law
  

  The Discordance of New York Central Jazz

  By John Hasnas, Cato Institute
  
  Regulation, 04/08/2010
  

  In 1909, the Supreme Court decided the case of New York Central & Hudson River R.R. Co. v. United States, which held corporations vicariously liable for the crimes their employees commit within the scope of their employment. The Supreme Court opted to relax the law’s constraints. This was a momentous mistake. I once heard jazz defined as the musical form in which one legitimizes a mistake by repeating it. If jazz is indeed the musical form in which one legitimizes a mistake by repeating it, then the federal judiciary has been playing New York Central jazz ever since. It is highly suggested that the judiciary change its tune and learn to play some more melodic classical music from the 19th century, when the rules of criminal law were consistent with its underlying theoretical structure and the oxymoron of vicarious criminal liability and the abomination of collective punishment were unknown.

  
  
  
• Economic Growth
  

  Pittsburgh and the Benchmark City: 2010 Update

  By Allegheny Institute for Public Policy, Allegheny Institute for Public Policy
  
  Report, 04/08/2010
  

  This study represents the second update of the Benchmark City concept. Reflecting the title of our original 2004 report we ask is Pittsburgh emulating the Benchmark City? Aside from a few indicators, on the whole we would have to say no. Spending is still far higher than the Benchmark, the City just embarked on trying to enact a new tax on college tuition, and shows no immediate signs of emerging from its position as a distressed municipality. While there are positive signs that the City is trying to do something for it’s under funded pensions and is committed to not taking on new debt, it still has huge looming liabilities with workers compensation and post-retiree health care (an obligation which in the last few years had a price tag placed upon it). Much more progress will be needed before Pittsburgh can move close to where other U.S. cities are financially.

  
  
  
• Foreign Policy/International Affairs
  

  Leadership Change in North Korea—What It Means for the U.S.

  By Bruce Klingner, The Heritage Foundation
  
  Backgrounder, 04/08/2010
  

  North Korean dictator Kim Jong-il’s faltering health has raised concerns about regime stability. Succession rumors have been swirling for years, with Kim’s third son, Jong-eun, currently rumored to be Kim’s favored choice. But regardless of whether leadership stays in the family or is wrested away by a challenger, a new North Korean leader is likely to keep in place the same belligerent policies—toward South Korea, toward China and Japan, and toward the U.S. If succession does not go smoothly, and if the North Korean regime were to collapse, the ensuing chaos would require immediate action by the U.S. and its Asian allies to restore stability, provide humanitarian relief, and search for and prevent the distribution of WMDs.

  
  
  
• Foreign Policy/International Affairs
  

  CEDAW and the New U.N. Gender Office: The U.S. Can Do Better

  By Grace Melton, The Heritage Foundation
  
  WebMemo, 04/08/2010
  

  Since 1980, no U.S. Senate has found a compelling case to ratify CEDAW, and every U.S. Administration since President Carter’s has declined to submit it to the Senate—and with good reason: Becoming a party to CEDAW would mean ceding authority to an unelected committee comprised of foreign gender “experts” and would do nothing to advance the rights of American women. The U.S. can be proud of its record in upholding human rights for men, women, and children at home and worldwide and its work to protect the rights of women in particular wherever they are threatened. Congress should withhold U.S. funds for the new U.N. gender agency, whose stated mission would more appropriately be addressed by U.N. human rights institutions.

  
  
  
• Foreign Policy/International Affairs
  

  U.S. Foreign Aid Recipients and Voting at the United Nations

  By Brett Schaefer, Anthony Kim, The Heritage Foundation
  
  Backgrounder, 04/08/2010
  

  Since 2000 about 95 percent of U.N. member states that receive U.S. assistance have voted against the United States most of the time in the U.N. General Assembly on non-consensus votes. The U.S. should inform aid recipients that their support—or lack of support—for U.S. priorities in the U.N. and other international organizations will directly affect future decisions on allocating U.S. assistance. In order to strengthen and broaden support for America’s policies in the U.N., the U.S. should also seek to build coalitions of like-minded nations that are firmly committed to political and economic freedom. Over the long term, U.S. aid could facilitate the expansion of these coalitions by encouraging more countries to become freer, both politically and economically.

  
  
  
• International Trade/Finance
  

  Deadlines and Delays: Chinese Revaluation Will Still Not Bring American Jobs

  By Derek Scissors, The Heritage Foundation
  
  WebMemo, 04/08/2010
  

  The exchange rate with China is not genuinely important to the U.S. economy. The U.S. should focus on these more important policies.

  
  
  
• Crime, Justice & the Law
  

  Policing for Profit: The Abuse of Civil Asset Forfeiture

  By Marian R. William, et al., Institute for Justice
  
  Report, 04/08/2010
  

  Policing for Profit: The Abuse of Civil Asset Forfeiture is the most comprehensive national study to examine the use and abuse of civil asset forfeiture and the first study to grade the civil forfeiture laws of all 50 states and the federal government. Under state and federal civil asset forfeiture laws, law enforcement agencies can seize and keep property suspected of involvement in criminal activity. This incentive has led to concern that civil forfeiture encourages policing for profit, as agencies pursue forfeitures to boost their budgets at the expense of other policing priorities. The results in this study demonstrate not only that federal equitable sharing is a loophole that state and local law enforcement use to circumvent strict state laws but also that pursuit of profit is a significant motivator in civil forfeiture actions. Simply put, when laws make civil forfeiture easier and more profitable, law enforcement engages in more of it.

  
  
  
• Economic Growth
  

  Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index

  By Arthur B. Laffer, Stephen Moore, Jonathan Williams, American Legislative Exchange Council
  
  Report, 04/08/2010
  

  In this third edition of Rich States, Poor States, authors Arthur B. Laffer, Stephen Moore, and Jonathan Williams explain why the economic crisis has been so rough on the states, what states should do to alleviate the fiscal pain, and what they should avoid. In addition, the authors provide the 2010 ALEC-Laffer State Economic Competitiveness rankings of the states based on their economic policies and examine which states took the right corrective actions and which states took the wrong ones in the face of this fiscal storm.

  
  
  
• The Constitution/Civil Liberties
  

  Citizens United v. Federal Election Commission: A Case for Limiting Campaign Finance Regulations

  By Nick Dranias, Goldwater Institute
  
  Policy Brief, 04/08/2010
  

  The Citizens United ruling methodically uprooted nearly every legal doctrine that stood poised to gut the First Amendment in the name of “campaign finance reform.” In place of arbitrary balancing tests, Citizens United requires the First Amendment to be enforced through broad, easily understood and widely applicable principles. Citizens United is the most important free-speech case in decades. Its reasoning suggests the Court will soon strike down all campaign finance regulations other than reasonable limits on contributions made directly to candidates and basic requirements about advertising disclaimers and spending disclosures. Sadly, politicians of all stripes are looking to circumvent the Court’s ruling. The wrong message has been received from the Citizens United case. Defenders of free speech and limited government must seize back the initiative by disposing of the volumes of complex campaign speech regulations that throttle political free speech–starting with Arizona’s regulation of “political committees.”

  
  
  
• Retirement/Social Security
  

  Preparing for Retirement in an Uncertain World

  By Liqun Liu, Andrew J. Rettenmaier, Thomas R. Saving, National Center for Policy Analysis
  
  Policy Report, 04/06/2010
  

  In previous generations, many workers could expect to automatically receive a steady stream of retirement income from Social Security and a pension from their union or employer. Like Social Security, traditional defined benefit pension plans promised a monthly annuity for life. Along with personal savings, pensions and Social Security were the mainstays of retirement. Increasingly, however, American workers must make their own retirement investment decisions. Lifecycle investment strategies offer one of the best choices for personal retirement investment. They reduce the risks of volatile stock prices by gradually shifting the mix of investments from stocks to bonds as an individual ages. As the individual approaches retirement, the portfolio becomes increasingly less risky.

  
  
  
• Information Technology
  

  Health Information Technology: Benefits and Problems

  By Devon M. Herrick, Linda Gorman, John C. Goodman, National Center for Policy Analysis
  
  Policy Report, 04/06/2010
  

  Proponents of health information technology (HIT) often claim that the United States lags behind other developed countries when it comes to the use of electronic medical records (EMRs), physician order entry systems and personal health records in clinics and hospitals. For example, only about 17 percent of doctors and 8 percent to 10 percent of U.S. hospitals use EMRs. Although many proponents discuss the perceived benefits of HIT, missing from the debate is an honest discussion of experiences with actual HIT systems, and the obstacles and pitfalls of poorly designed systems. The ultimate goal should be to improve quality, increase efficiency and add convenience — not just to create wired facilities.

  
  
  
• Economic Growth
  

  Can Decentralized Bottom-Up Post-Disaster Recovery Be Effective?

  By Virgil Storr, Stefanie Haeffele-Balch, Mercatus Center
  
  Working Paper, 04/06/2010
  

  Hurricane Katrina hit the Gulf Coast on August 29, 2005, leaving a great deal of destruction, pain and uncertainty in its wake. Significant and centralized government involvement is often viewed as the necessary solution to the collective action problem that occurs after a major crisis. Given the government’s poor performance post-Katrina, it is fortunate that a government coordinated recovery effort is not a necessary solution to the challenges of disaster recovery. Using data from interviews with affected residents and community leaders in New Orleans after Katrina, this article explores the effectiveness of private disaster recovery efforts and whether or not there are reasons to believe that a decentralized rather than a centralized response to disasters could be more effective.

  
  
  
• Economic and Political Thought
  

  Contagious Capitalism

  By Peter Leeson, Andrea Dean, Mercatus Center
  
  Working Paper, 04/06/2010
  

  In their 2009 article in American Journal of Political Science, Leeson and Dean empirically examined the democratic domino theory and found that while democratic dominos fall as this theory contends, they fall significantly “lighter” than the theory’s importance and influence suggest. Using their approach, this paper asks whether capitalism is also contagious and, if it is, whether it spreads more strongly or weakly than democracy. We find that capitalism spreads more strongly than democracy but that its spread rate is similar. This similarity suggests that changes in underlying “meta-institutions,” such as culture, may ultimately drive changes in both political and economic institutions and explains why political and economic dominoes fall with similar “heft.”

  
  
  
• Education
  

  Municipal Benchmarks for Massachusetts Middle Cities: A Look at Educational Achievement

  By Robert D. Gaudet, Pioneer Institute for Public Policy Research
  
  White Paper, 04/06/2010
  

  This analysis evaluates the educational performance of the 14 school systems that comprise the Pioneer Institute’s Middle Cities Initiative. These communities, which are outside of the Boston metropolitan area, struggle to attract businesses, maintain a viable tax base, control crime, and educate their children to the level needed to succeed in today’s world.The first phase of the research examines the Grade 10 MCAS a measure of overall student achievement and dropout rate characteristics of the 14 Middle Cities. A secondary analysis focuses on the relationship, if any, between dropout characteristics and MCAS achievement. This study is limited to identifying which Middle City districts stand out in terms of improving MCAS scores or reducing the dropout rate. The research is not designed to identify the reasons why a certain district outperforms other districts. The work only considers achievement and dropout data in the analysis; it does not utilize any qualitative data about curriculum and instruction in the Middle Cities districts.

  
  
  
• Education
  

  Fair to Middling: A National Standards Progress Report

  By R. James Milgram, Sandra Stotsky, Pioneer Institute for Public Policy Research
  
  White Paper, 04/06/2010
  

  Many Americans support the idea of common, or national, standards. They believe that if they are properly designed and appropriately implemented, national standards would ensure that all students, no matter where they live and what school they attend, are taught a body of common national and world knowledge, acquire a mature understanding and use of the English language, and gain enough mathematical knowledge and skill to participate competitively in the 21st Century global economy. These results remain to be demonstrated, however, and much depends on the quality and rigor of these standards. The purpose of this April 2010 progress report is to indicate how Common Core’s March drafts have addressed the deficiencies and limitations in its September and January drafts, and to spell out major areas needing further work. The analysis we present in this progress report shows that, although progress has been made, considerably more work is needed, particularly at the secondary level, to enable Common Core’s mathematics and English language arts (ELA) standards to be internationally benchmarked and to serve as the basis for valid and reliable high school exit level assessments.

  
  
  
• Monetary Policy/Financial Regulation
  

  Financial Regulation Reform: 16 Key Studies and Analyses

  By James L. Gattuso, The Heritage Foundation
  
  WebMemo, 04/06/2010
  

  The financial reform proposals now pending in the Senate would actually make crises and bailouts more—rather than less—likely.

  
  
  
• Monetary Policy/Financial Regulation
  

  Protecting Consumers in the Financial Marketplace: Thinking Outside the Boxes

  By James Gattuso , Todd Zywicki , Alex Pollock, David C. John, The Heritage Foundation
  
  Heritage Lecture, 04/06/2010
  

  Do consumers need a new regulatory agency to protect them in the financial marketplace? The question has been at the center of the ongoing congressional debate over financial services reform. But is such an agency really necessary, or will it do more harm than good? And if it is created, where should it be located, and—most critically— what powers should it have? A panel of experts discusses these and other questions regarding consumer protection and financial regulation.

  
  
  
• Foreign Policy/International Affairs
  

  Iran Economic Sanctions at the U.N. Security Council: The Incredible Shrinking Resolution

  By James Phillips, The Heritage Foundation
  
  WebMemo, 04/06/2010
  

  The Obama Administration should work with allies to impose strong sanctions on Iran outside the U.N. framework.

  
  
  
• Economic Growth
  

  Heritage Employment Report: March Jobs Report Springs Forward

  By Rea S. Hederman Jr., James Sherk, The Heritage Foundation
  
  WebMemo, 04/06/2010
  

  The labor market has begun to recover. But Congress’s pushing of higher taxes and regulation on business will make it slower and more arduous.

  
  
  
• Monetary Policy/Financial Regulation
  

  Protecting the Economy from Wall Street: Can the Financial Industry Pay for Its Own Bailout?

  By Nicole Gelinas, Manhattan Institute
  
  Issue Brief, 04/06/2010
  

  As part of Washington’s plan to fix Wall Street regulations, lawmakers, supported by President Obama, want financial firms, rather than taxpayers, to pay for future bailouts of their industry. Such a suggestion is impractical. In a future crisis, the financial industry would need more than $20 trillion up front to cover unknowable losses if it were to avoid turning to government, the current crisis shows. That’s the amount that would keep investors from deserting the financial system and causing a depression. This price tag is far beyond what the industry could afford.

  
  
  
• National Security
  

  The START Treaty: Undermining National Security

  By The Heritage Foundation, The Heritage Foundation
  
  Fact Sheet, 04/05/2010
  

  After more than a year of negotiations on a follow-on to the 1991 Strategic Arms Reduction Treaty (START), Presidents Barack Obama and Dmitry Medvedev reached an agreement. While many arms control advocates are jubilant about a 30% reduction in U.S. and Russian nuclear arsenals, larger questions linger.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  EPA’s Global Warming Regulations: A Threat to American Agriculture

  By Ben Lieberman, The Heritage Foundation
  
  WebMemo, 04/05/2010
  

  The EPA’s anti-agriculture global warming policy would make the future for American farming even dicier.

  
  
  
• Monetary Policy/Financial Regulation
  

  TARP II: Breeding More Bailouts

  By The Heritage Foundation, The Heritage Foundation
  
  Fact Sheet, 04/05/2010
  

  Congress and the Obama Administration are proposing new regulations that they claim will fix the financial industry. In reality, these regulations would hurt consumers and make future government bailouts more likely. They would also do little to address the real problems in the financial industry.

  
  
  
• Budget & Taxation
  

  The Struggle to Limit Government: A Modern Political History

  By John Samples, Cato Institute
  
  Book, 04/05/2010
  

  The Struggle to Limit Government assesses the highs and lows of the nearly 30-year struggle to limit government, including Reagan’s successes and failures, the drift away from Reagan’s legacy, and George W. Bush’s rejection of limited government. The author shows that the elections of 2006 and 2008 were a repudiation of the failed Bush presidency, not limited government, and cautions both parties to ignore this idea at their peril.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Hedging Against Peak Oil Shocks

  By Marc D. Weidenmier, American Enterprise Institute
  
  Working Paper, 04/05/2010
  

  Many policymakers and pundits have made the case that the United States should become “energy independent.” One economic interpretation of energy independence is that increased domestic energy production leads to greater risk sharing in the presence of imperfect capital markets. The wealth effects of energy production increase during peak oil shocks that help energy-producing states hedge against peak oil shocks. I test this hypothesis using consumption and gross state product data for US states for the period 1963-2007. I find that risk sharing is approximately 50 percent higher in energy producing states than non-energy states. The results suggest that oil shocks have different effects on energy and non-energy producing states. I offer two explanations for the finding. First, residents of non-energy producing states do not place enough of the assets in their wealth portfolio in energy stocks that allow them to hedge against peak oil shocks. Second, the wealth effects of energy production increase during peak oil shocks which helps residents (in energy producing states) smooth consumption and income. The analysis has two policy implications: 1) non-energy states should increase the share of energy stocks in their wealth portfolios; and 2) an increase in domestic energy production should increase risk sharing in the United States.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  The Troubling Case of Bisphenol A

  By Jon Entine, American Enterprise Institute
  
  Regulation Outlook, 04/05/2010
  

  On January 15, 2010, the U.S. Food and Drug Administration (FDA) issued a long-awaited update of its policy regarding bisphenol A (BPA)—an industrial chemical used to add strength and flexibility to many plastic products—finding it safe as currently used. The FDA review was undertaken after intense campaigning by advocacy groups and the media to ban or severely restrict BPA use, which continues even in the wake of the FDA decision. The campaigners’ focus has now expanded to include other regulatory bodies, as well as states and localities. If they are successful, they will jeopardize the system for making regulatory decisions based on sound science.

  
  
  
• Monetary Policy/Financial Regulation
  

  Debtor Selection: Resolving Insolvent, Globally Active Financial Firms

  By Peter J. Wallison, American Enterprise Institute
  
  Economic Outlook, 04/05/2010
  

  The Lehman Brothers bankruptcy in the fall of 2008 threw a sharp and critical light on the inadequacies of the world’s system for resolving insolvent, globally active financial institutions. The resolution of the Lehman insolvency is being administered in the United States, but the unusual circumstances associated with the filing of the petition seriously disfavored the creditors of its subsidiaries abroad and probably caused unnecessary losses for all of its creditors worldwide. The prevailing system for resolving bankrupt companies is territorial. In a territorial system, the country where the assets are located when the insolvency occurs has the authority to decide how those assets are distributed. The results can be quite arbitrary under the best of circumstances and unnecessarily add to the costs of credit for all financial firms. Creating a universal system, in which the rules of all countries are harmonized, would be a daunting task and would take too long to negotiate at a time when technology is driving the development of a global financial market. This Outlook recommends the adoption of a system called “debtor selection”—analogous to a U.S. corporation’s choice of a chartering state—in which financial firms would choose the legal system under which they would be resolved in the event of their insolvency, and, by treaty, all signatory nations would agree to enforce the insolvency rules of the jurisdiction selected in advance by the debtor.

  
  
  
• Budget & Taxation
  

  By The Numbers: What Government Costs in North Carolina Cities and Counties FY 2008

  By Michael Lowrey, John Locke Foundation
  
  Policy Report, 04/05/2010
  

  County and municipal governments provide many key services while taking in billions of dollars in revenue. Their roles grow as state government keeps more local funding sources and shifts more taxing power to localities. Still, finding comparative data is difficult. This report helps address that problem by providing information of how much local government costs in every city and county in North Carolina.

  
  
  
• Health Care
  

  Reforming Medicaid in Florida

  By Michael Bond, James Madison Institute
  
  Backgrounder, 04/05/2010
  

  Medicaid is rife with quality issues including poor access and poor quality. The State of Florida received permission in 2005 to begin making reform changes to their Medicaid Program by transitioning it towards an exchange model. Four years later, while it is still early, the initial results are encouraging. The reform has increased competition among health plans, reduced co-pays, and expanded and diversified patient benefits.

  
  
  
• Budget & Taxation
  

  Transparency in Government Spending: Next Steps for Florida

  By Sandra Fabry, James Madison Institute
  
  Policy Brief, 04/05/2010
  

  While several improvements have been made to bring Florida’s tradition of “Government in the Sunshine” into the 21st Century, it seems appropriate that the year that marked the anniversary of the beginning of Florida’s tradition of “government in the sunshine” also became the year in which Florida took an important leap towards living up to its nickname of the “Sunshine State,” particularly in the area of government finance. SB 1796 does not offer a fully comprehensive mandate for spending transparency, the discretion it leaves to the Legislative Auditing Committee provides an opportunity for greater transparency than it explicitly requires.

  
  
  
• Foreign Policy/International Affairs
  

  Obama’s Foreign Policy

  By Henry R. Nau, Hoover Institution
  
  Policy Review, 04/05/2010
  

  American foreign policy swings like a pendulum. Under President George W. Bush, U.S. foreign policy promoted a democracy agenda, used force readily to buttress and at times even displace diplomacy, championed free markets, and risked if not relished unilateralism. Under President Barrack Obama, U.S. foreign policy has swung decisively in the opposite direction. Now, U.S. security interests matter more than democracy, force is a last resort, substantial regulations are needed to end the booms and busts of global capitalism, and multilateralism is the sine qua non of U.S. diplomacy.

  
  
  
• Economic and Political Thought
  

  What Liberalism Is Missing

  By Laurence Cooper, Hoover Institution
  
  Policy Review, 04/05/2010
  

  Natural right as conceived by liberalism would be bound to differ from the versions conceived by conservatives. Liberal approaches to natural right would emphasize the insight into oneness that accords so well with liberalism’s universalist temper and theoretical bent. Conservative approaches, by contrast, would be more manifold and particularistic, owing to the conservative temper’s tendency to see distinctiveness before unity and its readier recognition of the powerful forces, both noble and base, that inhibit unity among separate parties. We would be faced with two compelling approaches to natural right. Just as important, the two approaches would face each other. Liberalism could only benefit, as would conservatism and indeed the country, from the ensuing debate over the meaning of that powerful, classically liberal idea.

  
  
  
• Transportation/Infrastructure
  

  The Trouble with High-Speed Rail

  By Liam Julian, Hoover Institution
  
  Policy Review, 04/05/2010
  

  Americans have recently digested federal expenditures of hundreds of billions of dollars. Is it possible that the country’s taxpayers, many of whom will never in their lifetimes ride a bullet train, will remain unbothered as tens and probably hundreds of billions of dollars more are allocated to high-speed rail experiments in districts far from their own? High-speed rail is simply an imprudent and inefficient answer to an unreal American transportation need. One has only to look at the history and development of the nation’s most-advanced, Obama-touted high-speed rail projects — in Florida and California — to see that the administration’s plan is merely a high-speed way to waste untold billions.