Recent Policy Studies

• Monetary Policy/Financial Regulation
  

  The Political Lessons of Depression-Era Banking Reform

  By Charles W. Calomiris, American Enterprise Institute
  
  Working Paper, 04/20/2010
  

  Ironically, the primary motivations for the main bank regulatory reforms in the 1930s (Regulation Q, the separation of investment banking from commercial banking, and the creation of federal deposit insurance) were to preserve and enhance two of the most disastrous policies that contributed to the severity and depth of the Great Depression-–unit banking and the real bills doctrine. Other regulatory changes, affecting the allocation of power between the Fed and the Treasury, were intended to reduce the independence of the Fed, while giving the opposite impression. The ill-conceived banking legislation of the 1930s took very little time to pass, but a great deal of time to disappear. The overarching lesson is that the aftermath of crises are moments of high risk in public policy. The Great Depression provoked banking reform legislation that was quick, comprehensive, and unusually responsive to popular opinion. Each of these three aspects increases the risk that regulation will have adverse consequences.

  
  
  
• Education
  

  Foxes Watching the Henhouse: How Higher Education’s Voluntary Accountability Systems Miss the Mark

  By Andrew P. Kelly, Chad Aldeman, American Enterprise Institute
  
  Education Outlook, 04/20/2010
  

  In his first speech to a joint session of Congress, President Barack Obama lamented America’s failure to keep pace with other industrialized nations and challenged the country to regain its mantle as the worldwide leader in postsecondary attainment. Accomplishing this goal requires not only greater access to postsecondary education, but higher levels of college completion. Providing consumers with better information about college costs and quality would help hold postsecondary institutions accountable. Two new voluntary accountability systems miss the mark, however, either by failing to offer new information or by making it difficult for consumers to make comparisons across institutions. A better accountability system would make such comparisons easier and would be mandatory, not voluntary.

  
  
  
• Foreign Policy/International Affairs
  

  Engaging North Korea: The Clouded Legacy of South Korea’s Sunshine Policy

  By Sung-Yoon Lee, American Enterprise Institute
  
  Asian Outlook, 04/20/2010
  

  The most prominent news out of the Korean peninsula in 2009 came from the North, where Kim Jong Il’s regime continued its policy of military provocation, capped by a long-range missile test in April and a second nuclear test in May. But 2009 also marked the passing of two former South Korean leaders, Presidents Kim Dae Jung and Roh Moo Hyun—the former succumbing to natural causes in his mid-eighties, the latter to a suicide in the face of a mounting personal scandal. Both leaders had staked their respective presidencies on engaging North Korea through the Sunshine Policy initiated under Kim Dae Jung a decade earlier and continued under Roh, albeit under a different name. From our vantage point today, nearly a decade after its implementation, the Sunshine Policy looks increasingly ineffective in light of Pyongyang’s unmitigated nuclear threat and continued oppression of its population.

  
  
  
• Labor
  

  Obama Appointees with Strong Union Ties Could Push National Labor Relations Board in Wrong Direction

  By Thomas P. Gies, American Enterprise Institute
  
  On the Issues, 04/20/2010
  

  How might recess appointments to the National Labor Relations Board (NLRB) affect federal labor law? Controversial appointee Craig Becker is known for advocating policies that fall outside the mainstream view of labor laws. Although the views of one member of the NLRB will not automatically translate into dramatic policy changes, concerns that members of the NLRB may rewrite important principles of federal labor laws through litigation are not unfounded. Whether President Barack Obama’s NLRB would be able to enact key provisions of the Employee Free Choice Act through litigation rather than congressional action remains to be seen.

  
  
  
• Foreign Policy/International Affairs
  

  Canada’s Cold Front: Lessons of the Alaska Boundary Dispute for Arctic Boundaries Today

  By Christopher Sands, Hudson Institute
  
  Paper, 04/20/2010
  

  Canada’s perspective on the Arctic is still largely domestic. Internationally, Ottawa is relatively isolated; few countries recognize the full extent of Canadian boundary claims, and Canada’s domestically oriented maximalist position makes it a difficult negotiating partner for other countries. Far from greedily conspiring to acquire Canadian territory or resources, US officials express exasperation with Canada and try to work with other governments with interests in the region. But the Arctic is on the periphery of US interests, and in spite of its economic potential, there is a limited amount of diplomatic energy and military resources that administrations in Washington will devote to disputes in the region. The result is that Canada’s intransigence is rewarded—for now—but that its position is sufficiently unconvincing that Canadians may one day fume when Arctic boundaries are settled over their objections.

  
  
  
• The Constitution/Civil Liberties
  

  Mowing Down The Grassroots: How Grassroots Lobbying Disclosure Suppresses Political Participation

  By Jeffrey Milyo, Institute for Justice
  
  Report, 04/20/2010
  

  The Institute for Justice released a new report, “Mowing Down the Grassroots,” that discusses the importance of grassroots activism and how grassroots lobbying laws discourage the average citizen from participating in the political process.With the rise of many grassroots groups, this kind of political activism is becoming more important than ever. Under current laws, however, if individuals or groups spend more than $500 promoting rallies, etc., without registering with the government, those involved can face major fines and even jail time.

  
  
  
• National Security
  

  Freedom or Terror: Europe Faces Jihad

  By Russell A. Berman, Hoover Institution
  
  Book, 04/20/2010
  

  Russell A. Berman offers an analysis of Europe’s ambivalence toward jihadist terror and the spread of aggressive Islamism, with particular emphasis on the European responses—or lack thereof—to Islamist terrorism. Berman describes how some European countries opt for appeasing and apologizing for terror, whereas others stand up for freedom. He presents an outline of a complex continent of different nations and traditions to further our understanding of the range of reactions to Islamism. Ultimately, the author reveals, the question of European responses to Islamist terrorism is a question of culture: the confrontation of contemporary European culture with the cultural values of jihadist radicals. Whether Europe is truly up to the challenge will only become clear in the struggles of the next decade.

  
  
  
• Economic and Political Thought
  

  The Ideological Struggle for Pakistan

  By Ziad Haider, Hoover Institution
  
  Book, 04/20/2010
  

  Author Ziad Haider, a Pakistani scholar, shows clearly how Pakistan’s viability as a state depends in large part on its ability to develop a new and progressive Islamic narrative. Since its inception in 1947, the idea of Pakistan has been a contested one. Today, Pakistan faces a militant Islamist threat that its elected government is trying to combat in fractious collaboration with the army. As the country finds itself on the defensive against an array of groups claiming to wave the banner of Islam, it must counter their ideology decisively. This assessment of the struggle for Pakistan’s identity, from its birth to the present day, provides a political and cultural understanding of the role and use of Islam in Pakistan’s evolution.

  
  
  
• Foreign Policy/International Affairs
  

  Islamism and the Future of the Christians of the Middle East

  By Habib C. Malik, Hoover Institution
  
  Book, 04/20/2010
  

  Christianity may have “won the world,” in the sense of being the most widespread religion in history with the largest number of adherents, but it is steadily losing ground in and around its birthplace. Although Christians of the East are leaving their homelands in record numbers, the powers of the West have shown little interest in their fate. In this essay by the noted Lebanese scholar Habib Malik—himself a child of Christian Lebanon—Malik offers a sobering account of the ordeal of Christian Arabs of the Middle East in this era of Islamist radicalism. Malik explains why the number of native Christians in the Middle East—now between ten and twelve million—continues to dwindle, one of the most prominent reasons being the rise of Islamic extremism, or Islamism, in both its Sunni and its Shiite varieties. Despite weaving a bleak tapestry, he offers hopeful suggestions on how to achieve a healthy pluralism between Muslims and Christians in the region.

  
  
  
• Foreign Policy/International Affairs
  

  Saudi Arabia and the New Strategic Landscape

  By Joshua Teitelbaum, Hoover Institution
  
  Book, 04/20/2010
  

  In this work, Joshua Teitelbaum evaluates Saudi foreign policy in the Persian Gulf and in the Arab-Israeli peace process and provides a shrewd assessment of the Saudi-U.S. relationship. Teitelbaum debunks the traditional view of Saudi foreign policy that emphasizes the Saudi concern with the Israeli-Palestinian conflict and explains how the true concern of Arabia’s rulers is the ideological battle that has been opened up by Iran’s push into Arab affairs. He tells why U.S. policy makers should be encouraged to cement the alliance with Saudi Arabia by resolutely addressing the Iranian threat to Saudi domestic politics and Riyadh’s regional position. Saudi Arabia and the New Strategic Landscape is a detailed look into the way the Saudi rulers juggle the pressures and claims that intrude on their domain.

  
  
  
• Foreign Policy/International Affairs
  

  Syria through Jihadist Eyes: A Perfect Enemy

  By Nibras Kazimi, Hoover Institution
  
  Book, 04/20/2010
  

  In Syria through Jihadist Eyes, Nibras Kazimi, a young writer on Arab affairs, challenges that country’s presumed readiness for peace and normalcy. With field notes accumulated in a Syrian environment not generally hospitable to research and inquiry, Kazimi provides a unique view of the Syrian regime and its base at home, filling a void in our understanding of the intelligence barons and soldiers who run that country. He offers a look at the tactical, propagandist, and strategic ingredients required, in jihadist eyes, for a successful jihad—and whether those ingredients are available in Syria. Kazimi assesses how sectarianism and the global jihadist interest in taking the battle to Syria could derail policy overtures from Washington aimed at normalizing relations with the Asad regime. Jihad in Syria makes strategic sense for the jihadists, he concludes; trying to accommodate that regime seems, at best, on uncertain grounds and perhaps an exercise in wishful thinking.

  
  
  
• National Security
  

  The Department of Defense Should Assess the Security Risks of Climate Change Policies

  By Marlo Lewis, Competitive Enterprise Institute
  
  On Point, 04/20/2010
  

  They have made some headway, though the Department is still far from a hotbed of climate alarm. DOD’s Quadrennial Defense Review Report (QDR) calls climate change a “key issue” that will play a “significant role in shaping the future security environment.” On the other hand, at a recent briefing on the QDR at the Woodrow Wilson International Center for Scholars, a top-ranking DOD official pointedly declined to define climate change as a “national security threat,” calling it instead an “instability accelerant”—a factor that could exacerbate conditions conducive to conflict within and among nations. Angst, hyperbole, and cheerleading for cap-and-trade were conspicuously absent. This paper aims to inject some badly needed balance into discussions of climate change and national security. First, it takes a skeptical look at the claim that climate is an important “threat multiplier” or, as the QDR puts it, an “accelerant of instability and conflict.” Second, it outlines several ways in which climate policies can adversely affect U.S. national security.

  
  
  
• Regulation & Deregulation
  

  Ten Thousand Commandments 2010

  By Clyde Wayne Crews, Competitive Enterprise Institute
  
  Report, 04/20/2010
  

  In absolute terms, the U.S. government is the largest government on planet Earth, whether one looks at revenues or expenditures. The costs fully convey the federal government’s on-budget scope, and they are sobering enough. Yet the government’s reach extends well beyond the taxes that Washington collects and the deficit spending and borrowing now surging. Federal environmental, safety and health, and economic regulations cost hundreds of billions of dollars every year over and above the costs of the official federal outlays that now dominate the policy agenda. Precise regulatory costs can never be fully known, because, unlike taxes, they are unbudgeted and often indirect. But scattered government and private data exist on scores of regulations and on the agencies that issue them, as well as on regulatory costs and benefits. Some of that information can be compiled to make the regulatory state somewhat more comprehensible. That is one purpose of the annual Ten Thousand Commandments report, highlights of which appear next.

  
  
  
• Health Care
  

  Obamacare: Impact on Taxpayer Funding of Abortion

  By Chuck Donovan, The Heritage Foundation
  
  WebMemo, 04/20/2010
  

  The Patient Protection and Affordable Care Act will spawn a new wave of federal and state legislative debate—as well as judicial action—on abortion funding. Moreover, the executive order signed by President Obama on March 24 to limit federal abortion funding will have little or no effect on the new war over taxpayer-funded abortions. Until Congress and the states take certain steps, the long truce over public funding of abortion is now officially broken.

  
  
  
• Transportation/Infrastructure
  

  No Tax Increase for Federal Transportation Programs?

  By Ronald D. Utt, The Heritage Foundation
  
  WebMemo, 04/20/2010
  

  It is apparent from a review of White House and congressional transportation policies that enhanced mobility and congestion mitigation is of little interest to current leadership. Instead, Americans can expect a future of greater congestion and time-consuming travel as government prioritizes a lifestyle transformation over a level of economic vitality reliant upon timely and cost-effective mobility. If there is a silver lining to this odd embrace of the past, it is that Congress and the President will be less likely to get the tax increase they need to pay for it: One can hardly expect motorists to willingly pay higher fuel taxes to fund a war against them. As this is the best outcome that can be expected, opponents of higher gas taxes should hope that President Obama continues to let Ray be Ray.

  
  
  
• Foreign Policy/International Affairs
  

  Busting the Brazil/Russia/India/China (BRIC) Myth of Challenging U.S. Global Leadership

  By Ariel Cohen, Lisa Curtis, Derek Scissors, Ray Walser, The Heritage Foundation
  
  WebMemo, 04/20/2010
  

  The American people cannot blindly cede global leadership to any country, including the BRIC summit nations. At the BRIC summit, China’s Hu Jintao, India’s Mammohan Singh, Russia’s Dmitry Medvedev, and Brazilian host Lula da Silva will seek to advance the impression that the BRICs are uniquely positioned to shape the global economic and political agenda. Such an impression is reinforced by the Obama Administration’s readiness to buy into the notion that America is declining in competitiveness, influence, and power as part of a transition to a “Post-American,” multi-polar world. Below, there are five myths about BRIC that Americans should recognize before succumbing to Obama-inspired fatalism.

  
  
  
• Education
  

  Education Spending in the American Recovery and Reinvestment Act: Stimulating the Status Quo

  By Lindsey Burke, The Heritage Foundation
  
  WebMemo, 04/20/2010
  

  The American Recovery and Reinvestment Act (ARRA), signed in February 2009, included nearly $100 billion in new funding for the Department of Education (DOE). Over $36 billion of it remains unspent, and bills in both the House and Senate are calling for even more funding for teacher jobs. It is unlikely that billions more in federal spending will provide a long-term solution to state budget problems. Instead, such spending would prevent states from addressing fiscal problems, rethinking existing programs, and increasing efficiency.

  
  
  
• Crime, Justice & the Law
  

  Tort Reform in the States: Protecting Consumers and Enhancing Economic Growth

  By Bill G. Batchelder, et al., The Heritage Foundation
  
  Heritage Lecture, 04/20/2010
  

  The role of the states, particularly the idea that most governmental power should be in the states, is important to America’s constitutional system. It has been somewhat eroded in many fields by adverse Supreme Court decisions, but the states are still where much of the innovation in governmental activity is to be found, particularly the kind of activity that assists and encourages economic growth. One of these areas of innovation is tort reform, which includes malpractice lawsuits with their enormous impact on medical care, especially the cost of medical care. Overall, it is estimated that in 2007 alone, the tort system cost an estimated $252 billion—almost $1,000 for every person in the United States. But states like Mississippi, Texas, and Ohio have proven that with the political will and political leadership, and if the public understands the problem and policymakers pick the right tools, this problem can be solved.

  
  
  
• Immigration
  

  Time to Decouple Visa Waiver Program from Biometric Exit

  By Jena Baker McNeill, The Heritage Foundation
  
  WebMemo, 04/19/2010
  

  Currently, the Visa Waiver Program (VWP), which affords foreign travelers from member nations the ability to travel to the United States without a visa, remains at a relative standstill in terms of adding new countries to its membership roster. In fact, besides the admission of Greece last month, no new countries have been permitted entrance into the program since 2008. While Congress and DHS may see deployment of biometric exit as a necessary step toward understanding the number of visa overstays inside the U.S., the expansion of VWP should not be inhibited by the failure to produce a biometric system. Congress should remove this hurdle by decoupling VWP from the exit requirement and paving the way for the admission of new member countries.

  
  
  
• Foreign Policy/International Affairs
  

  The Smolensk Air Disaster: United States Must Stand United with Poland

  By Sally McNamara, The Heritage Foundation
  
  WebMemo, 04/19/2010
  

  President Obama’s support for Poland in the aftermath of the Smolensk air disaster demonstrates America’s enduring commitment to U.S.-Polish relations.

  
  
  
• National Security
  

  Quadrennial Defense Review’s Homeland Defense Realignment Leaves U.S. Less Prepared

  By Jena Baker McNeill, The Heritage Foundation
  
  WebMemo, 04/19/2010
  

  Effective recommendations for homeland defense in the QDR must take into account the long-term threat realities facing the United States.

  
  
  
• Information Technology
  

  The FCC and Broadband Regulation: What Part of “No” Did You Not Understand?

  By James Gattuso, The Heritage Foundation
  
  WebMemo, 04/19/2010
  

  The FCC should take “no” as an answer, and drop plans to regulate broadband Internet service.

  
  
  
• Foreign Policy/International Affairs
  

  How Corrupt Is the World Food Program?

  By Till Bruckner, Jon Entine, American Enterprise Institute
  
  The American, 04/15/2010
  

  The UN’s World Food Program claims that allegations of a scandal in Somalia are overblown and isolated. But such problems may be far more widespread than reported, and more transparency is needed. For the poor and hungry, the situation is daunting. Raising aid agency responsiveness towards beneficiaries may hold out the greatest hope of improving accountability in international aid. But exact mechanisms to make that happen are elusive. In order to have real effects, such transparency and disclosure must be backed by effective sanctions when the performance of aid agencies falls short of beneficiaries’ entitlements.

  
  
  
• The Constitution/Civil Liberties
  

  Enhanced FCC Regulation of Product Placement Would Breach Free Speech Rights

  By Joseph Lewczak, Washington Legal Foundation
  
  Legal Backgrounder, 04/15/2010
  

  As the Supreme Court reiterated in its most recent ruling on commercial speech, “the speaker and audience, not the government, assess the value of the information presented.” Although the current regulatory scheme affords the FCC enforcement authority against certain forms of product placement, some interest groups have heightened the cry for more pervasive regulation, and the FCC is now considering its response. The FCC should not over-regulate for the sake of protecting consumers when the current regulatory scheme suffices to address potential deception, especially at the cost of impeding the First Amendment value of creative expression.

  
  
  
• Crime, Justice & the Law
  

  “Responsible Corporate Officer”: Business Executives Face Strict Liability Under Novel Criminal Law Doctrine

  By Brian Stimson, Kimyatta McClary, Washington Legal Foundation
  
  Legal Backgrounder, 04/15/2010
  

  In recent years, the federal government has aggressively prosecuted the allegedly improper distribution and promotion of drugs under the federal Food, Drug, and Cosmetics Act (FDCA) and the False Claims Act (FCA). As a result of these prosecutions, drug companies have agreed to civil and criminal settlements worth billions of dollars. Because federal officials suspect that improper distribution and promotion continues, some commentators predict more individual prosecutions under the FDCA’s “responsible corporate officer” doctrine. Under that doctrine, any corporate officer who has the authority and responsibility to prevent violations of the FDCA may be criminally liable for the violations, regardless of the officer’s knowledge or intent. Until the FDA issues guidance concerning the responsible corporate officer doctrine, the best, if not only, defense may be a good offense. That is, an aggressive compliance program with robust reporting mechanisms, led by senior corporate officers, may be the best means for avoiding liability.

  
  
  
• Crime, Justice & the Law
  

  Excessive Control Exposes Litigation Financier To Court-Imposed Sanctions

  By Damon R. Leichty, Washington Legal Foundation
  
  Legal Opinion Letter, 04/15/2010
  

  The issue of litigation financing has recently captured the attention of lawmakers, judges, and critics. Late last year, the Florida Court of Appeals weighed in on the issue in Abu-Ghazaleh v. Chaul, albeit somewhat indirectly. Litigation financing traditionally has been challenged through the old and fading doctrines of champerty and barratry. Chaul II approached the intermeddling of “third-parties” in litigation through other means—the imposition of attorney fees and costs. Aside from the issue of potential sanctions, the extensive intermeddling in this litigation raises serious concerns about its effects on settlements and the independence of counsel. The level of control by the litigation financier in Chaul II was extreme and undesirable. Courts in other states should take heed of the Florida Court of Appeals’ decision, as should elected officials interested in taking legislative action on litigation financing.

  
  
  
• Crime, Justice & the Law
  

  Private Securities Suit “Reform”: Undermining Economic Recovery To Aid And Abet Lawyers?

  By Benjamin P. Keane, Washington Legal Foundation
  
  Working Paper, 04/15/2010
  

  In a period of great economic uncertainty, the importance of the Central Bank and Stoneridge decisions, as well as the PSLRA, cannot be underemphasized. Without the protections afforded by these Supreme Court cases and the legislative framework laid out by the PSLRA, secondary securities actors and businesses of all types would be subject to unnecessary securities class action liability exposure. The consequences of such a scenario would be destructive for the U.S. economy as well as the average American investor. Tangible deterrence of illegal behavior is an admirable policy goal, but only when the means of deterrence truly shape human behavior and do not threaten to upend overall economic stability. Misguided action, no matter how good the intentions, will only open the door to unintended and undesirable consequences.

  
  
  
• Transportation/Infrastructure
  

  Federal Highway Program Shortchanges Half of the States

  By Ronald D. Utt, The Heritage Foundation
  
  WebMemo, 04/15/2010
  

  Among the many contentious issues that will confront Congress in the months leading up to reauthorization of the federal highway program (now postponed until December 2010) is the program’s inherent inequities relating to the distribution of federal trust fund revenues to the states. Under current law, the federal fuel taxes paid into the trust fund by motorists and truckers are returned to the states by a series of mathematical formulae that attempt to match the scope and usage of each state’s surface transportation system with payments received from the trust fund. Unless the donor states push aggressively, they will once again find themselves with another five years of annual spending shortfalls.

  
  
  
• Monetary Policy/Financial Regulation
  

  The “Comprehensive” Problem with Derivatives Regulation

  By Dave Mason, The Heritage Foundation
  
  WebMemo, 04/15/2010
  

  Leading derivatives reform proposals amount to little more than a frenzied insistence to do something, anything, to regulate financial derivatives. Proponents must show why particular derivatives need to be more closely regulated and that the schemes they propose will reduce rather than increase risks in financial markets.

  
  
  
• Budget & Taxation
  

  Obamacare: Impact on Taxpayers

  By Curtis Dubay, The Heritage Foundation
  
  Backgrounder, 04/15/2010
  

  The hodgepodge of new taxes that have already or will soon take effect as a result of the Patient Protection and Affordable Care Act may not all show up in the income tax tables, but their huge cost is still very real. This cost will become most apparent in lost wages and international competitiveness, and it reduces middle- and low-income families’ wages just as surely as an income tax hike would. These taxes break President Barack Obama’s promise not to raise taxes on families making less than $250,000 per year.

  
  
  
• Budget & Taxation
  

  Taxifornia

  By Robert P. Murphy, Jason Clemens, Pacific Research Institute
  
  Report, 04/15/2010
  

  In a quest for solutions, this second installment of the California Prosperity Project assesses California’s tax burden, the structure of its tax system, and how both of these affect the state’s competitiveness. The research on which this study is based shows that taxes matter. When we impose taxes on certain things, we basically tend to get less of those things. Taxes influence decisions concerning work effort, savings, investment, entrepreneurship, risk taking, and job creation. These are all things California needs. Additional work, greater investing by individuals and businesses, and more entrepreneurship are the foundations for a prosperous society. Understanding how tax rates, and in particular marginal tax rates, influence these activities is critical in understanding the challenges facing California.

  
  
  
• Health Care
  

  Repeal and Replace, But With What?

  By John R. Graham, Pacific Research Institute
  
  Health Policy Prescriptions, 04/15/2010
  

  Repeal of ObamaCare is possible, but it has to be replaced with real change that gives the American people control of their health dollars. Any alternative that ignores that fundamental reform will fall as short as the Kassebaum-Kennedy Act of 1996, and fail to slay the zombie of government-run health care. This Policy Prescriptions offers suggestions as to the kind of reform health care should seek.

  
  
  
• Health Care
  

  Health Care Reform: How Much Does It Redistribute Income?

  By Patrick Fleenor, Gerald Prante, Tax Foundation
  
  Fiscal Facts, 04/15/2010
  

  The health care bill passed by Congress and signed by President Obama is arguably the most significant piece of domestic policy legislation since the 1960s. The law will transform the financing of U.S. health care as government mandates coverage for individuals and becomes more involved in the pricing and terms of the policies they buy. Also, the bill expands Medicaid so that more people above the poverty line will now be eligible (up to 138 percent of poverty level). But expanding subsidized access to health care is no free lunch. Somebody must pay for it. The following is part of the Tax Foundation’s ongoing fiscal incidence project that is designed to gauge the income redistribution of U.S. fiscal policies.

  
  
  
• Budget & Taxation
  

  New KMPG International Location Study: U.S. Is Falling Behind; Taxes Are a Major Fault

  By Scott A. Hodge, Tax Foundation
  
  Fiscal Facts, 04/15/2010
  

  U.S. lawmakers who are worried about the economy’s slow recovery and weak job growth should take special note of KPMG’s latest international competitiveness study that ranks the U.S. only 8th best out of the ten countries surveyed for their cost-effectiveness for business. Of the 26 cost components that KPMG measured, many—such as labor costs, access to markets, and suitable land sites—are largely beyond the control of policy makers. Some components—such as crime rates, schools and universities, and the cost of housing—are not factors that can be improved quickly with policy changes. However, tax policy is a factor that federal and state lawmakers can change immediately and that can have dramatic short-term and long-term benefits. Cutting the federal corporate tax rate would immediately improve U.S. competitiveness while setting the stage for long-term economic growth.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Economic Freedom: A No Regrets Strategy for Reducing Global Energy Consumption

  By Todd Wynn, Cascade Policy Institute
  
  Report, 04/15/2010
  

  This empirical study exposes a relationship between greenhouse gas intensity, energy intensity and economic freedom. The level of a country’s economic freedom is a statistically significant and negative determinant of both energy intensity and greenhouse gas intensity. Countries with higher levels of economic freedom not only have more energy efficient and less carbon intensive economies, but over time these countries continue to decrease the amount of energy used and the amount of carbon dioxide emitted per unit of production. The merits of free markets and economic prosperity should not be overlooked as a potential method for reducing carbon emissions.

  
  
  
• Budget & Taxation
  

  The Next California Budget: Buying Results Citizens Want at a Price They Are Willing to Pay

  By David Osborne, Reason Foundation
  
  Policy Study, 04/15/2010
  

  California is in an unprecedented fiscal crisis. Critical services have been cut deeply. Borrowing to cover operating costs—a practice that is not only illegal but also dangerous—has become a habit. And public disgust with elected leaders has become endemic. There is a wise Native American saying: “When you’re riding a dead horse, the best strategy is to dismount.” Clearly, California’s current budget process is a dead horse. Budgeting for Outcomes offers state leaders an opportunity to dismount and find a new one.