Recent Policy Studies

• Natural Resources, Energy, Environment, & Science
  

  Weighing the Value of a Ton of Pollution

  By Nicholas Z. Muller, Robert Mendelsohn, Cato Institute
  
  Regulation, 07/01/2010
  

  In a 2009 paper, we developed a fixed exchange rate policy design for air pollution. We summarize our findings in this article. Instead of allowing firms to exchange permits on a ton-for- ton basis, the permits in our system reflect the relative harm caused by emissions from different regulated sources. The exchange rates are equal to the inverse of the ratio of the firms’ marginal damages per ton of emissions.

  
  
  
• Regulation & Deregulation
  

  The Economic Losers from Smoking Bans

  By Michael L. Marlow, Cato Institute
  
  Regulation, 07/01/2010
  

  The article examines ban noncompliance data from Ohio, under the hypothesis that establishments that regularly violate the ban do so because it is profitable to do so. The detail of the noncompliance data allows this analysis to determine what sorts of establishments, if any, are harmed by the bans and what sorts of establishments are not. The data indicate that individuals—owners, employees, customers, and smokers—associated with bars and organizations are much more likely to be harmed than their counterparts in restaurants

  
  
  
• Economic Growth
  

  Tracking “Go-Getters” Across America

  By Tate Watkins, Bruce Yandle, Cato Institute
  
  Regulation, 07/01/2010
  

  Our work examined the association between personal freedom and State migration patterns. Here we found that international movers are sensitive to personal freedom; domestic movers are not. Domestic migrants are sensitive to the other components of the overall freedom index: fiscal and regulatory freedom. Our research suggests that knowledge economy and freedom indicators can explain what we have termed go-getter migration patterns, especially for international movers. Go-getters will build and shape future economies. States with abundant freedom and a burgeoning knowledge sector will attract the go-getters.

  
  
  
• Monetary Policy/Financial Regulation
  

  Money to Go

  By Todd J. Zywicki, Cato Institute
  
  Regulation, 07/01/2010
  

  Auto title lending provides a valuable service in particular niches of the financial services marketplace, especially for those with impaired credit, the unbanked, and small, independent businesses. One-size-fits-all regulation of interest rates, rollovers, minimum maturities, or maximum loan size ignores this wide variety in the way in which different borrowers rely on title loans. Regulations that eliminated title lending from the marketplace could force many of those who use title lending to sell their cars (thereby losing their transportation) or switch to alternative, less-desirable types of credit such as payday lending and pawnshops. That consumers use title lending instead of these alternatives suggests the value of this product. That the overwhelming number of consumers who use nontraditional lending products do so responsibly confirms the value of making these choices available to consumers. Misguided paternalistic regulation of nontraditional lending will deprive consumers of this valuable option and inevitably hurt those who the laws are purportedly intended to help.

  
  
  
• Monetary Policy/Financial Regulation
  

  No Theory? No Evidence? No Problem!

  By Craig Pirrong, Cato Institute
  
  Regulation, 07/01/2010
  

  There is no compelling theoretical or empirical case for limits on speculative derivatives positions. Indeed, there is not even a less-than-compelling case. Moreover, the particular limits that the Commodity Futures Trading Commission has proposed are especially pernicious because they are more intrusive and constraining than more traditional limits (that do not include crowding-out provisions or constraints on swap dealers who are hedging legitimate risk exposures). As a result, if implemented, proposed position limits will impair the proper functioning of commodity markets and produce no offsetting benefit.

  
  
  
• Regulation & Deregulation
  

  Consumer Protection Without Law

  By Omri Ben-Shahar, Cato Institute
  
  Regulation, 07/01/2010
  

  Within contract law, the plight of consumers is often regarded as a basis for enhancing contract enforcement and of bolstering the access of consumers to breach of contract remedies. The one-way contract idea suggests that this is a misguided priority, barking up the wrong tree. Rather than paying lip service to consumers’ “vindication of rights,” “access to justice,” or the right to be informed through mandatory disclosures, this article takes the reality of non-enforcement as given and considers ways to overcome it. It is the cultivation of more potent substitutes that could help consumers.

  
  
  
• Monetary Policy/Financial Regulation
  

  Lots of Regulatory Expansion but Little Reform

  By Alex J. Pollock, American Enterprise Institute
  
  Regulation Outlook, 07/01/2010
  

  In the wake of every financial crisis, politicians face the demand that they do something. They feel they have to enact something to “make sure this never happens again”—although historically it has always happened again anyway. Moving the boxes on the regulatory organization chart and expanding regulatory powers are always available options, and the financial regulatory bills currently under consideration in the House and Senate display the typical process of doing both. Missing from the bills, however, are strategies to create countercyclical elements to moderate swings, as well as reforms for Fannie Mae and Freddie Mac, the government-sponsored enterprises at the center of the housing bubble. Absent those reforms, the proposed regulations will do little to address the flaws that caused the crisis in the first place.

  
  
  
• Monetary Policy/Financial Regulation
  

  Missing the Point: Lessons from The Big Short

  By Peter J. Wallison, American Enterprise Institute
  
  Financial Services Outlook, 07/01/2010
  

  Although regulations that severely restrict credit default swap activity would be consistent with the views of the senators and representatives who designed the regulatory legislation now under consideration, such regulations ignore the policy lesson implicit in The Big Short—that to reduce or prevent bubbles, we need more, not fewer, market participants willing to take positions contrary to the prevailing views of the majority. Before voting to impose these restrictions, it would be a good idea for Senators Durbin and Levin and their House and Senate colleagues to read The Big Short.

  
  
  
• National Security
  

  Could the Taliban Take Over Pakistan’s Punjab Province?

  By Ahmad Majidyar, American Enterprise Institute
  
  Middle Eastern Outlook, 07/01/2010
  

  While Washington and Islamabad have directed considerable attention and resources to fighting terrorism in Pakistan’s tribal areas, rising militant activity and growing Taliban and al Qaeda influence in the country’s most populous province of Punjab have been largely ignored. Under increasing pressure from U.S. drone attacks and the Pakistani Army’s continuing offensives in the Federally Administered Tribal Areas, the Taliban and al Qaeda are looking to Pakistan’s political and military heartland for refuge, revenge, and new alliances. Although Punjab is not in imminent danger of a Taliban takeover, the growth of terrorist activity in the region, if unchecked, could have serious consequences for Pakistan’s stability, the war in Afghanistan, India-Pakistan relations, and international terrorism.

  
  
  
• Foreign Policy/International Affairs
  

  The Revolutionary Guards’ Looting of Iran’s Economy

  By Ali Alfoneh, American Enterprise Institute
  
  Middle Eastern Outlook, 07/01/2010
  

  The Islamic Revolutionary Guards Corps (IRGC) and Basij’s financial activities have a far reaching impact on the Iranian economy and society. IRGC intervention distorts the market and marginalizes not only the private sector, but also the revolutionary foundations that have dominated the Iranian economy since the revolution. The IRGC also places a burden on the public sector because of the hidden flow of public funds to IRGC companies through generous subsidies. By targeting the economic interests of the IRGC, the international community may be able to force the Guards to recalculate the risk of continuing the Islamic Republic’s nuclear program.

  
  
  
• Foreign Policy/International Affairs
  

  If War Is Not the Answer…

  By Robert Haddick, American Enterprise Institute
  
  The American, 07/01/2010
  

  If U.S. policy makers opt for a security guarantee protecting Persian Gulf allies from Iran, they need to prepare the American public for what to expect. Just as with the Cold War, a security guarantee will commit the U.S. to a long struggle against an intelligent and experienced adversary who possesses important competitive advantages. A security guarantee will risk U.S. prestige and military forces. It will also create second- and third-order risks, such as increased friction with China, which will increasingly become Iran’s patron.

  
  
  
• Economic Growth
  

  Cash for Clunkers: A Retrospective

  By Max Borders, American Enterprise Institute
  
  The American, 07/01/2010
  

  Cash for Clunkers was unprecedented in that it was a hasty-but-temporary measure in which top-down industrial policy was carried out through the sheer force of incentives. As with the bailouts of ’08 and ’09, the failures of the policy were hidden well enough to embolden government officials in the future. They could always claim their policies helped to avert economic catastrophe, though they only extended the economic malaise. If nothing else, Cash for Clunkers allowed America's most resource-glutting corporations to slouch onward—to tread on the skeletons of stillborn businesses, to host union parasites, and to elude creative destruction for a few more years.

  
  
  
• Transportation/Infrastructure
  

  Menace to Mobility

  By Gabriel Roth, American Enterprise Institute
  
  The American, 07/01/2010
  

  The federal fuel tax needs to be reauthorized before March 2011; Congress should end it instead. Eliminating it would result in federal fuel taxes being phased out and give the states—which own the interstates—full responsibility for highway financing. States would have strong incentives to improve the highways in their jurisdiction, spawning innovation. Successful innovations, such as contracting out some or all of their operations to private firms, would be copied in other states.

  
  
  
• Economic Growth
  

  No Way to Help Small Business

  By Scott Shane, American Enterprise Institute
  
  The American, 07/01/2010
  

  Small businesses are facing cash flow problems. Roughly 60 percent of small business owners responding to a September 2009 American Express OPEN Small Business Monitor survey reported concerns with their cash flow. And 51 percent of small business owners answering a January 2010 Discover Small Business Watch survey said they had delayed paying bills because of a temporary cash flow problem. If we really want to help small businesses access capital, we need to provide them with better access to non-bank sources of financing, particularly trade credit, and make sure that the owners themselves are able to put more capital into their businesses either in the form of loans or as equity.

  
  
  
• Education
  

  Are There More Girl Geniuses?

  By Christina Hoff Sommers, American Enterprise Institute
  
  The American, 07/01/2010
  

  The developing gender gap in the gifted education programs of New York City does not signal that girls are smarter than boys. Rather, it exemplifies how well-intentioned government officials and educators can disregard boys’ needs and abilities and unwittingly adopt policies detrimental to boys’ well-being. It is a small part of the long story of how American boys across the ability spectrum and in all age groups have become second-class citizens in the nation’s schools.

  
  
  
• Elections, Transparency, & Accountability
  

  Knowing What You Own: An Efficient Government How-To Guide for Managing State and Local Property Inventories

  By Anthony Randazzo, John Palatiello, Reason Foundation
  
  Policy Study, 07/01/2010
  

  How much land does your state or local government own? It seems like a basic question that would have a simple answer, but many states and counties do not have the kind of basic property and asset data that a well-run business or responsible family relies on to manage its finances. Only 16 of the states have well-functioning systems for tracking what they own. And while 17 others states are developing some type of inventory system, another 17 states (plus Washington D.C.) are sorely lacking in this area. With millions of acres and thousands of assets in government portfolios, officials should take steps to identify what they own, determine whether government or private ownership is most effective for that asset, and streamline the efficient transfer of all unneeded real property.

  
  
  
• Elections, Transparency, & Accountability
  

  Hope and Experience: Election Reform through the Lens of the AEI-Brookings Election Reform Project

  By John C. Fortier, Norman J. Ornstein, Thomas Mann, American Enterprise Institute
  
  Studies, 07/01/2010
  

  The American electoral system is in many respects an outlier among the world’s democracies. The indirect election of its president through the casting of electoral votes by the states, with no federal constitutional standing for the popular vote, is perhaps the most peculiar. Another is the extraordinary range and frequency of elections, matched only by Switzerland’s system. In the realm of election administration, two characteristics stand out: the highly decentralized nature of the system and the oversight and control of the election system by partisan elected officials.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Distributional Impacts in a Comprehensive Climate Policy Package

  By Kevin A. Hassett, Aparna Mathur, Gilbert E. Metcalf, American Enterprise Institute
  
  Working Paper, 07/01/2010
  

  A perennial concern with proposals to put a price on carbon emissions either through a carbon tax or a cap and trade program is the perceived regressivity of the policy. We find that carbon pricing is indeed regressive when annual income is used to sort households though the extent of the regressivity depends on the degree of backward shifting of the carbon price. The story changes, however, if households are ranked by a proxy for lifetime income. Now carbon pricing is at most mildly regressive and may in fact be progressive depending on the relative importance of uses side versus sources side heterogeneity.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  The Economic Impact of an Offshore Drilling Ban

  By David Kreutzer, John Ligon, The Heritage Foundation
  
  WebMemo, 07/01/2010
  

  If a total ban on offshore drilling is implemented by 2011, then by 2035 Americans could expect national income to drop by $5.5 trillion, total costs of imported oil to rise by $737 billion, total disposable income to decrease $54,000 per family of four, and job losses to exceed 1.5 million. A total ban on offshore drilling would pull the rug out from the economy’s incipient recovery.

  
  
  
• Health Care
  

  National Health Care Reform: How It Will Affect Our Economy, Our Families, and Our Communities

  By Drew Sexton, Washington Policy Center
  
  Policy Note, 07/01/2010
  

  The Washington Policy Center hosted its 8th Annual Health Care Conference on June 4th at the SeaTac Doubletree Hotel. The half day event featured an interview with Washington State Attorney General Rob McKenna and a keynote address by Harvard Business School professor Regina E. Herzlinger, Ph.D. Over 300 people attended to hear from the featured speakers and two in-depth panels about how the new federal health care reform will affect our economy, health providers, taxpayers, and patients.

  
  
  
• Economic Growth
  

  How Texas Averted the Great Recession

  By Houstonians for Responsible Growth, Demographia
  
  Studies, 07/01/2010
  

  Texas has received considerable publicity for superior economic performance during the recession (the “Great Recession”) and the fact that the “housing bubble” had very little impact in the state. The performance of Texas has been particularly favorable compared to its other largest state competitors, California and Florida, both of which experienced severe economic and housing market distress. One of the factors that helped Texas avoid both the Great Recession and the housing bubble was its market oriented land use policies. By contrast, where land use restrictions were more restrictive (California, Florida and other places), house price increases were far more substantial, as was the subsequent price collapse.

  
  
  
• Education
  

  A Short History of Collective Bargaining in Washington Public Schools

  By Liv Finne, Washington Policy Center
  
  Policy Note, 07/01/2010
  

  Over the years one of the most powerful and politically-connected organizations in Washington, the Washington Education Association (WEA) – the teachers’ union – has helped construct a complex web of rules, regulations and limitations that dictate every important decision made in the day-to-day operation of public schools. The result is that today’s public school principals do not have the management flexibility to be innovative education leaders, using their ideas, experience and initiative to improve the education of their students. The growth of collective bargaining agreements has had a far-reaching effect on education policy. Public sector unions represent a significant obstacle to public education reform in Washington.

  
  
  
• Budget & Taxation
  

  The Grand Bargain Is Dead

  By Matthew Marlin, Jonathon Scott, Kaitlyn Wolf, Matt Mayer, Buckeye Institute for Public Policy Solutions
  
  Report, 07/01/2010
  

  A simple question must be raised: Why isn’t part of the solution to Ohio’s budget deficit to have government workers share the pain and burden of Ohio’s economic woes by cutting their lucrative compensation packages? Should government workers really be immune from, as President Barack Obama states, the worst economic environment since the Great Depression? Do our elected officials really believe that gym teachers should make over $90,000 for 1,350 hours per year or that state nurses should clear $200,000 in a year because administrators cannot efficiently manage the workload? Because of the lack of government transparency, most Ohioans still believe our public servants make less money, but have job protection and earn a decent pension. Well, the “Grand Bargain” that served our state so well for so long is dead.

  
  
  
• Immigration
  

  Immigrants and Crime: Perception vs. Reality

  By Stuart Anderson, Cato Institute
  
  Analysis, 07/01/2010
  

  Recent events in Arizona show how quickly concerns about possible crimes committed by immigrants can dominate the immigration policy debate. The murder of an Arizona rancher in March became the catalyst for the state legislature passing a controversial bill to grant police officers wider latitude to check the immigration status of individuals they encounter. But do the facts show immigrants are more likely to commit crimes than natives?

  
  
  
• Budget & Taxation
  

  The Nation’s Mid- and Long-Term Fiscal Challenges

  By Veronique de Rugy, Mercatus Center
  
  Testimony, 07/01/2010
  

  There are two ways to interpret the deficit problem. The first concludes that taxes aren’t increasing fast enough and we must adjust tax policy so that it can finance the projected levels of government spending. The second concludes that spending is growing too quickly and that increased spending, not insufficient revenue, drives the gap between the two.

  
  
  
• Health Care
  

  Revitalizing Federalism: The High Road Back to Health Care Independence

  By Robert Moffit, The Heritage Foundation
  
  Backgrounder, 07/01/2010
  

  The Patient Protection and Affordable Care Act represents more than a federal takeover of health care; it is a direct threat to federalism itself. Never before has Congress exercised its power under Article I, Section 8 of the Federal Constitution to force American citizens to purchase a private good or a service. Congress is also intruding deeply into the internal affairs of the states, commandeering their officers, specifying in minute detail how they are to arrange health insurance markets within their borders, and determining the products that will be sold to their citizens. If allowed to stand, this unprecedented concentration of political power in Washington will reduce the states to mere instruments of federal health policy. State legislatures and sympathetic Members of Congress should consider (among other actions) crafting a constitutional amendment to guarantee the personal liberty of every citizen in the area of health care.

  
  
  
• Economic Growth
  

  Institutional Reforms in Xian’an

  By Joseph Fewsmith, Hoover Institution
  
  China Leadership Monitor, 06/30/2010
  

  Like many agricultural areas of the interior, Xian’an district in Hubei Province faced enormous problems from growing numbers of bureaucratic offices, increasing numbers of cadres, escalating debt, and financial malfeasance. Beginning in 2000, a new Party secretary, Song Yaping, began drastic measures to reduce the size of the cadre force and restructure local government. With strong political backing and a forceful personality, Song appears to have been largely successful, though his reforms remain controversial. The bigger question is whether the model adopted in Xian’an can be spread to other areas, and the answer to that appears to be negative.

  
  
  
• Economic Growth
  

  The Turning Point in Housing

  By Barry Naughton, Hoover Institution
  
  China Leadership Monitor, 06/30/2010
  

  China reached an important turning point in housing policy on April 17, 2010. Policy shifted from stimulating growth to controlling speculative demand for housing, as well as increasing the supply of affordable housing. The central government has pushed the policies on reluctant local government officials, who are dependent on land-sales revenues and closely intertwined with real estate interests. Despite the tensions in implementation, central government commitment to the policy turn appears strong, and it is likely it will be sustained.

  
  
  
• National Security
  

  Party-Military Coordination of the Yushu Earthquake Response

  By James Mulvenon, Hoover Institution
  
  China Leadership Monitor, 06/30/2010
  

  On 14 April 2010, a 6.9 magnitude earthquake struck Yushu Tibetan Autonomous Prefecture in China’s southern Qinghai Province. The quake killed over 2,000 people and destroyed most of the buildings in the area. As in other recent Chinese natural disasters, such as the May 2008 Wenchuan earthquake in Sichuan Province, the Chinese People’s Liberation Army was mobilized to lead rescue and recovery operations. This article examines the organization of the response effort, and assesses its implications for party-military relations.

  
  
  
• Foreign Policy/International Affairs
  

  The Mind of Empire: China’s History and Modern Foreign Relations

  By Christopher A. Ford, Hudson Institute
  
  Book, 06/30/2010
  

  With an economy and population that dwarf most industrialized nations, China is emerging as a twenty-first-century global superpower. Even though China is an international leader in modern business and technology, its ancient history exerts a powerful force on its foreign policy. In The Mind of Empire: China’s History and Modern Foreign Relations, Christopher A. Ford expertly traces China’s self-image and its role in the world order from the age of Confucius to today. Ford argues that despite its exposure to and experience of the modern world, China is still strongly influenced by a hierarchical view of political order and is only comfortable with foreign relationships that reinforce its self-perception of political and moral supremacy. Recounting how this attitude has clashed with the Western notion of separate and coequal state sovereignty, Ford speculates–and offers a warning–about how China’s legacy will continue to shape its foreign relations.

  
  
  
• Transportation/Infrastructure
  

  Federal Highway Trust Fund: Recommit to Better Highways and Enhanced Mobility

  By Ronald D. Utt, The Heritage Foundation
  
  WebMemo, 06/30/2010
  

  Over the past year Congressman James, chairman of the House Committee on Transportation and Infrastructure, has introduced a partial draft of new highway legislation that would divert even more money from roads to bicycles, walking, transit, land use planning, and more federal employees to operate the program. If these efforts are enacted into law as part of the next (now delayed) highway reauthorization bill, even more money from motorists will be diverted into non-highway and non-transportation purposes. Starved for funds, roads will continue to deteriorate and congestion will worsen as little or no new capacity is added to accommodate a growing population and economy.

  
  
  
• Budget & Taxation
  

  The Unsustainable Welfare State: Reform is Necessary

  By The Heritage Foundation, The Heritage Foundation
  
  Fact Sheet, 06/30/2010
  

  The growth of welfare spending is unsustainable and will drive the United States into bankruptcy if allowed to continue unreformed. Welfare spending is projected to cost taxpayers $10.3 trillion over the next 10 years.

  
  
  
• Economic and Political Thought
  

  The Challenges of Islamist Ideology to America’s Founding Principles

  By Michael Nazir-Ali, The Heritage Foundation
  
  Backgrounder, 06/30/2010
  

  Radical Islamism poses critical challenges for free societies in the West. In recent years, there have been increasing calls for some legal recognition in Western contexts of certain aspects of Islamic law. Because of the fundamental opposition between the assumptions of public law in the West and those of the Sharica, it is not only undesirable, but actually impossible to provide Sharica with a recognized place in terms of the rule of law.

  
  
  
• Economic Growth
  

  Economic Freedom in the “Bolivarian Andes” Is Melting Away

  By James Roberts, The Heritage Foundation
  
  Lecture, 06/30/2010
  

  The rapid descent of these three resource-rich nations toward the status of failed states and the threat that this poses to the security of the Western Hemisphere are of great concern to policymakers. The statist “Bolivarian” policies being pursued are doomed to failure since they aggravate institutional weaknesses that the three Bolivarian states have in common. Meanwhile, the performance of more market-friendly and democratic countries such as Peru, Colombia (the region’s most improved country in the 2010 Index of Economic Freedom), and long-time Latin American economic freedom leader Chile proves that Andean governments can deliver true economic and political freedom to their citizens if their politicians govern with the correct mix of policies favoring private property, rule of law, and market-based democratic institutions.

  
  
  
• The Constitution/Civil Liberties
  

  The DISCLOSE Act, Deliberation, and the First Amendment

  By John Samples, Cato Institute
  
  Policy Analysis, 06/29/2010
  

  Responding to the Supreme Court’s decision in Citizens United v. Federal Election Commission, Sen. Charles Schumer and Rep. Chris Van Hollen have proposed the DISCLOSE Act, which mandates disclosure of corporate sources of independent spending on speech, putatively in the interest of shareholders and voters. However, it is unlikely that either shareholders or voters would be made better off by this legislation. Shareholders could demand and receive such disclosure without government mandates, given the efficiency of capital markets. The benefits of such disclosure for voters are likely less than assumed, while the costs are paid in chilled speech and in less rational public deliberation. DISCLOSE also prohibits speech by government contractors, TARP recipients, and companies managed by foreign nationals. The case for prohibiting speech by each of these groups seems flawed. In general, DISCLOSE exploits loopholes in Citizens United limits on government control of speech to contravene the spirit of that decision and the letter of the First Amendment.

  
  
  
• Education
  

  Tax-Credit Scholarships in Nebraska: Forecasting the Fiscal Impact

  By Brian Gottlob, Friedman Foundation for Educational Choice
  
  Research Study, 06/29/2010
  

  In addition to allowing Nebraska to expand educational opportunities to lower- and middle-income families and improving the equity of its education system, a tax-credit-funded scholarship program would generate fiscal benefits for local school districts, increasing the available resources for students who remain in public schools. Because much of their revenue does not vary with enrollment, school districts would retain much of the funding associated with students who use scholarships to transfer from public to private schools. The overall impact on public schools would be to increase the financial resources available per student. Depending on a few key program design elements, it could also result in fiscal savings to the state budget.

  
  
  
• Foreign Policy/International Affairs
  

  Ma at Mid-Term: Challenges for Cross-Strait Relations

  By Alan D. Romberg, Hoover Institution
  
  China Leadership Monitor, 06/29/2010
  

  In his inaugural address in May 2008, Ma Ying-jeou laid out a vision for cross-Strait relations that was at once ambitious but also grounded in the reality of Taiwan’s political divisions. He set out a complex formula on the question of Taiwan’s status that he felt he could both defend domestically and still use to establish common ground to bring progress across the Strait as well as greater international space. And underlying the substance, he adopted an approach that was almost assured of achieving some success, if only because it was sharply different from that of his predecessor and eschewed all ambition to “declare independence.” But there was—and is—no certainty regarding how far cross-Strait relations can go based on this approach alone. After providing some assessment of recent developments, including the Economic Cooperation Framework Agreement, Taiwan politics, and the current issues in U.S.-China relations regarding Taiwan, this essay steps back for a moment to assess how Ma has done with respect to his inaugural vision and to suggest some factors that will affect how much more progress he can make over the remainder of this term.

  
  
  
• Foreign Policy/International Affairs
  

  Beijing’s Tightrope Walk on Iran

  By Michael D. Swaine, Hoover Institution
  
  China Leadership Monitor, 06/29/2010
  

  In dealing with the Islamic Republic of Iran, as with the Democratic People’s Republic of Korea, Beijing confronts yet another exquisite dilemma. As with North Korea, the Chinese leadership must walk a diplomatic and political tightrope in its policies toward Tehran, in this instance seeking to maintain increasingly lucrative economic and strategically useful political ties to a major power and friend in a critical region of the world. At the same time, it must support international efforts to sustain the global nonproliferation regime, prevent the further destabilization of a highly volatile and critical region, and avoid antagonizing Washington and other key powers. This essay first examines China’s interests and policies toward Iran, especially as they affect the United States. It then takes a close look at the lines of apparent debate within China on the Iran nuclear issue and Chinese policy.

  
  
  
• The Constitution/Civil Liberties
  

  Defining Deference Down, Again: Independent Agencies, Chevron Deference, and Fox

  By Randolph J. May, Free State Foundation
  
  Article, 06/29/2010
  

  In FCC v. Fox Television Stations, Inc., Justice Scalia’s plurality opinion affirmed that actions of independent agencies are not subject to any form of heightened scrutiny on review as a result of agencies’ status. His view is based upon an exaggerated notion of Congressional control of the independent agencies’ actions that assumes a greater degree of agency political accountability than is warranted. Justice Scalia does not confront the reality that it is the limitation on presidential removal power of agency heads which is at the heart of such insulation and the absence of the removal power similarly limits congressional control of the independent agencies.

  
  
  
• Health Care
  

  Repealing Obamacare? Yes, We Can!

  By The Heritage Foundation, The Heritage Foundation
  
  Fact Sheet, 06/29/2010
  

  More than 20 states have already signed onto lawsuits challenging the federal government for overreaching its regulatory powers, particularly by creating an individual mandate. States are also pushing back on requirements to establish federally approved health insurance exchanges and to expand Medicaid eligibility. Meanwhile, legislators in 37 states have introduced or enacted resolutions to advance “health care freedom.” It’s not enough for conservatives in Congress to play defense. They need to be on the forefront pushing a health care agenda that would actually help millions of Americans. This can be done by fixing the glaring unfairness in the tax treatment of health insurance, promoting robust competition among insurance plans, and aggressively pursuing state-based solutions.

  
  
  
• Health Care
  

  Obamacare: Hurting Those Who Need Health Care the Most

  By The Heritage Foundation, The Heritage Foundation
  
  Fact Sheet, 06/29/2010
  

  One of the goals of the Patient Protection and Affordable Care Act was increasing health care coverage for Americans. However, the Congressional Budget Office has estimated that 23 million people will be uninsured even with the new law. In addition, Obamacare will necessitate higher taxes, result in fewer choices for families, and provide ineffective plans.

  
  
  
• Education
  

  Education Standards: The Next Federal Takeover

  By The Heritage Foundation, The Heritage Foundation
  
  Fact Sheet, 06/29/2010
  

  The Obama Administration’s push for national education standards is a federal overreach into yet another sector of American life. Banking, auto manufacturing, health care, and now education will be guided more by Washington’s priorities than by the needs of the American people. The result will be standardizing mediocrity in American classrooms.

  
  
  
• National Security
  

  The Visa Waiver Program: A Security Partnership

  By The Heritage Foundation, The Heritage Foundation
  
  Fact Sheet, 06/29/2010
  

  The Visa Waiver Program (VWP) allows foreign travelers from participating countries to come to the U.S. for 90 days or fewer without the need for a visa. Travelers are screened prior to arrival through an online portal called the Electronic System for Travel Authorization. The VWP fights terrorism by promoting information sharing, stopping terrorists and criminals from entering North America, creating foreign partnerships, and increasing physical security measures.

  
  
  
• Foreign Policy/International Affairs
  

  Empowering a New Era in the United States–Philippines Security Alliance

  By Renato De Castro, Walter Lohman, The Heritage Foundation
  
  Backgrounder, 06/29/2010
  

  To manage growing Chinese power, the U.S. needs a reliable, adequately equipped, like-minded partner on the South China Sea. The Philippines needs American leadership and assistance to fully develop its capacity for territorial defense. U.S. and Philippine needs and interests coincide and should serve as a basis for empowering a new era in the security alliance.

  
  
  
• International Trade/Finance
  

  Time to Build a Clean Energy Future through the KORUS FTA

  By Anthony Kim, The Heritage Foundation
  
  WebMemo, 06/28/2010
  

  The pending Korea–U.S. Free Trade Agreement, known as the KORUS FTA, is a ready-made vehicle for pioneering a clean energy future and ensuring greater prosperity in the two nations. Accelerating U.S. clean energy innovation and production has become an economic necessity for America’s future. Liberalizing trade should be a fundamental part of any U.S. strategy to promote clean energy technology. The KORUS FTA poses a practical policy choice to achieve that goal. Now is the time for President Obama to act.

  
  
  
• Monetary Policy/Financial Regulation
  

  Financial Reform in Congress: A Disorderly Failure

  By David C. John, James Gattuso, The Heritage Foundation
  
  WebMemo, 06/28/2010
  

  A congressional conference committee has finally come to an agreement on a financial regulation bill. Weighing in at close to 2,000 pages, the legislation represents the largest expansion of Washington’s role in the financial industry since the Great Depression. This legislation is the wrong approach to fixing the financial industry. Rather than end the “too big to fail” mindset, it reinforces it. Rather than end bailouts, it ignores the ongoing bailout of Fannie Mae and Freddie Mac. Rather than make the financial system safer, it reduces firms’ ability to handle risk. And rather than help consumers, it raises their costs, reduces their choices, and hinders the capital formation necessary to make them more prosperous. Congress should consider these problems carefully before rushing into final passage next week.

  
  
  
• Regulation & Deregulation
  

  The Quality and Use of Regulatory Analysis in 2008

  By Jerry Ellig, Patrick McLaughlin, Mercatus Center
  
  Working Paper, 06/28/2010
  

  Since 1974, all presidents have issued executive orders requiring regulatory agencies to analyze the anticipated results and economic effects of proposed regulations. The requirements have become more comprehensive over time. The last seven presidents have each maintained but also sought to fine-tune regulatory analysis requirements, presumably because the existing requirements have never quite produced the intended results. Despite the numerous attempts by various administrations to refine regulatory analysis, there have been very few systematic analyses of these refinements to ensure that they do what they were intended to do. A detailed qualitative protocol to evaluate regulatory analysis before and after the changes in the executive order could aid in assessing effects of the changes on the quality and use of regulatory analysis.

  
  
  
• Budget & Taxation
  

  The Crisis in Public Sector Pension Plans: A Blueprint for Reform in New Jersey

  By Eileen Norcross, Andrew Biggs, Mercatus Center
  
  Working Paper, 06/28/2010
  

  New Jersey’s defined benefit pension systems are underfunded by more than $170 billion, an amount equivalent to 44 percent of gross state product and 328 percent of the state’s explicit government debt. Depending on market conditions, the state will begin to run out of money to pay benefits between 2013 and 2019. The state’s five defined benefit pension plans cover over 770,000 workers, and more than a quarter million retirees depend on state pensions paying out almost $6 billion per year in benefits. Nationwide, state pensions are underfunded by as much as $3 trillion, approximately 20 percent of America's annual output.

  
  
  
• Welfare
  

  The 2010 Index of Dependence on Government: Dramatic Spike in Dependence Projected

  By William Beach, Patrick Tyrrell, The Heritage Foundation
  
  Backgrounder, 06/28/2010
  

  The number of federal aid programs and Americans who rely on government subsidies for their existence is ever-growing. The number of Americans who now pay no taxes has passed 35 percent. The International Monetary Fund predicts financial devastation for the U.S. by 2015 unless drastic cuts are made in the deficit immediately, and Congress has lost control of the national budget. An impending tipping point for the structure of American government and civil society is tangible.

  
  
  
• Crime, Justice & the Law
  

  Key Questions for Elena Kagan

  By Robert Alt, The Heritage Foundation
  
  WebMemo, 06/28/2010
  

  Elena Kagan comes to the committee with one of the thinnest records of any Supreme Court nominee in recent history. She has no judicial experience, a scarce number of academic writings, and virtually no litigation experience prior to her current post as Solicitor General. For these reasons, it is critical that Kagan answer questions about disturbing issues in her record. If Senators are to determine whether she should be confirmed for an appointment where she could very well shape the law for decades to come, there are several questions Kagan should answer—and answer fully.

  
  
  
• National Security
  

  New START: Potemkin Village Verification

  By The New START Working Group, The Heritage Foundation
  
  Backgrounder, 06/28/2010
  

  The New Strategic Arms Reduction Treaty (START) verification regime is not sufficient to detect large-scale cheating on nuclear arms reduction by the Russian Federation. Past experience has shown that inadequate verification measures are likely to be exploited. If Russia has the necessary resources, it can deploy many more warheads and missiles than allowed by the treaty with little risk of detection. To state that this Treaty begins to establish a basis for further reductions leading toward eliminating nuclear weapons is absurd. If the current Administration intends to pursue deeper nuclear reductions leading to nuclear elimination, verification regimes more intrusive and demanding than the now-expired START verification regime will be needed. The weak verification measures in the New START Treaty are a step in the wrong direction.

  
  
  
• National Security
  

  Deterrence Misapplied: Challenges in Containing a Nuclear Iran

  By Frederick W. Kagan, Council on Foreign Relations
  
  Papers and Studies, 06/28/2010
  

  The question of deterring a nuclear Iran arises from a recognition of the difficulty (or improbability) of preventing Iran from acquiring nuclear weapons. There is a strong desire in some circles to argue that Iran can be deterred and contained like the Soviet Union was in order to make the prospect of a nuclear Iran more comfortable, and to reduce the need for the painful consideration of the price the world might pay for allowing Iran to acquire nuclear weapons. It may be that there is no way to stop the Islamic Republic from acquiring such weapons. It may be that the price of attempting to do so is too high. It does not follow, however, that the world can be comfortable with the prospect of a nuclear Iran because it can be deterred.