Recent Policy Studies

• Health Care
  

  Further Medicaid Bailout: Unfair and Irresponsible

  By Brian Blase, The Heritage Foundation
  
  WebMemo, 07/14/2010
  

  The Center on Budget and Policy Priorities estimated that an extension of the Medicaid bailout would add $15 billion to the national debt. This substantial cost—with the deficit at nearly $2 trillion already—is almost reason enough to reject the extension. But a continued bailout would also disproportionately benefit states that have the most bloated Medicaid programs and would further delay those states from taking necessary steps to live within their budgets.

  
  
  
• Economic and Political Thought
  

  The Moral Basis for Economic Liberty

  By Robert Sirico, The Heritage Foundation
  
  First Principles, 07/14/2010
  

  Defense of economic liberty without reference to morality will ultimately prove injurious to liberty itself. Rightly understood, capitalism is simply the name for the economic component of the natural order of liberty. It means expansive ownership of property, fair and equal rules for all, economic security through prosperity, strict adherence to the boundaries of ownership, opportunity for charity, wise resource use, creativity, growth, development, prosperity, abundance. Most of all, it means the economic application of the principle that every human person has dignity and should have that dignity respected.

  
  
  
• National Security
  

  New START: Beyond the Rhetoric

  By Peter Brookes, Owen Graham , The Heritage Foundation
  
  WebMemo, 07/14/2010
  

  The Obama Administration views New START as the crown jewel of its effort to “reset” U.S.–Russian relations, making them anxious for the Senate to ratify the treaty. Yet America’s national security should not be a sacrificial lamb to better ties between Moscow and Washington. Accordingly, the U.S. Senate should give New START a careful and thorough vetting and be careful not to rush its constitutional duty to review treaties.

  
  
  
• International Trade/Finance
  

  “Rebalancing” Chinese Investment in the U.S.

  By Derek Scissors, The Heritage Foundation
  
  WebMemo, 07/14/2010
  

  China’s investment in the U.S. is skewed toward the government in part because political opposition has blocked spending outside bonds—investment protectionism. There is certainly a very narrow range of sectors directly important to national security that should be off-limits. Yet most of the political opposition goes well beyond that. Such opposition is not well-considered; the U.S. should accept more non-bond investment.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  A Rational Post-Spill Policy That Allows Offshore Drilling

  By Ben Lieberman, The Heritage Foundation
  
  WebMemo, 07/14/2010
  

  The Deepwater Horizon spill is the first significant spill from a well in American waters since 1969. In the meantime, offshore oil production has become a significant source of domestic energy and jobs. Fully a third of American oil comes from offshore, and the potential for additional growth is great. The U.S. can and should respond to the spill but in ways that do not jeopardize the benefits of tapping America’s offshore energy.

  
  
  
• Health Care
  

  Obama Health Law: What It Says and How to Overturn It

  By Betsy McCaughey, Encounter Books
  
  Book, 07/14/2010
  

  The fight against ObamaCare is just beginning. The new health law, signed on March 23, 2010, destroys our constitutional rights. For the first time in history, the federal government will dictate how doctors treat their privately insured patients. That will affect you, no matter what brand-name health plan you have. Worse, some hospitals will stop taking Medicare. Where will seniors go?

  
  
  
• Economic and Political Thought
  

  Athwart History: Half a Century of Polemics, Animadversions, and Illuminations

  By Roger Kimball, Encounter Books
  
  Book, 07/14/2010
  

  For much of the postwar period, William F. Buckley Jr. was the leading figure in the conservative movement in America. Culled from millions of published words spanning nearly sixty years, Athwart History: Half a Century of Polemics, Animadversions, and Illuminations offers Buckley’s commentary on the American and international scenes, in areas ranging from Kremlinology to rock music. The subjects are widely varied, but there are common threads linking them all: a love for the Western tradition and its American manifestation; the belief that human beings thrive best in a free society; the conviction that such a society is worth defending at all costs; and an appreciation for the quirky individuality that free people inevitably develop.

  
  
  
• The Constitution/Civil Liberties
  

  The ‘Costs’ of Free Speech: Consequentialism and the First Amendment Don’t Mix

  By Matt Welch, Reason Foundation
  
  Reason, 07/14/2010
  

  Seeing individuals as powerless in the face of choice, or as empty vessels too easily overwhelmed by nefarious content, is a key component of paternalism. This view denies citizens their basic agency and autonomy, reinforcing the long-discredited but still popular notion that mass behavior is dictated from the top down. Suppressing peaceful speech to prevent potential violence is a kind of pre-emptive heckler’s veto. We see it when partisans try to silence the opposition and when the government weighs the costs and benefits of free expression.

  
  
  
• Economic and Political Thought
  

  The Return of the Jeffersonian Vision and the Rejection of Progressivism

  By Michael Barone, American Enterprise Institute
  
  The American, 07/14/2010
  

  The major political development of the last 17 months has been an inrush of hundreds of thousands or even millions of Americans into political activity, symbolized by but not limited to the tea party movement. Tea partiers have adopted the language and in some cases even the costumes of the Founders. While the Progressives’ descriptions of a “horse and buggy” Constitution and their sense that giant auto factories and steel mills were the harbinger of the future seem tinny and out of date, the language of the Founders continues to resonate with the clear timbre of a silver spoon tapping a crystal glass. And so one can take satisfaction that most of our fellow citizens in our freeholders’ republic still hold these truths to be self-evident.

  
  
  
• Budget & Taxation
  

  Nevada Panel Considering Tax Reform Options, Including New Business Taxes

  By Joseph Henchman, Tax Foundation
  
  Fiscal Facts, 07/13/2010
  

  Every state that manages without a personal or corporate income tax routinely confronts calls to make it easier for the state to raise revenue by enacting an income tax. As Nevada confronts the latest periodic call to enact a corporate income tax, state legislators have funded a study of the state’s tax system. The 25-member panel and its contractor have explicitly been instructed to “review proposals for broad-based business taxes.” Fiscal reform is expected to be a major topic for the Silver State in 2011. Among the options under consideration, and critiqued in a new report by the Nevada Policy Research Institute, “One Sound State, Once Again,” are corporate income taxes, gross receipts taxes, and a broadened sales tax. The state should be careful about its options, as its ability to attract investment and capital depends greatly on its favorable tax climate.

  
  
  
• Budget & Taxation
  

  A Review of Per Capita County Spending in South Carolina

  By South Carolina Policy Council, South Carolina Policy Council
  
  Fact Sheet, 07/13/2010
  

  Like total state spending, local spending in South Carolina is on the rise. Total state spending has increased every year since Fiscal Year 1993-1994 (the latest year available in the current Budget & Control Board historical analysis report). During the same period, local spending has also increased every year, excepting from Fiscal Year 2001-2002 to Fiscal Year 2002-2003. Likewise, while private sector employment has fallen, government hiring has increased. In fact, South Carolina is well above the national and Southeast average for local/state government share of non-farm employment. Essentially, public sector hiring is crowding out private sector employment in South Carolina.

  
  
  
• Information Technology
  

  Forbearance Follies: What the FCC’s New Framework Portends for the “Third Way”

  By Seth L. Cooper, Free State Foundation
  
  Perspectives from FSF Scholars, 07/13/2010
  

  The FCC’s order in the Qwest Phoenix MSA proceeding appears to set new standards that, if consistently applied to future petitions, could make forbearance relief virtually impossible to obtain. The problems from a policy perspective plaguing the “Third Way” proposal to regulate broadband Internet services are well known. But the problematic nature of the Chairman’s proposal from a legal perspective is almost certainly further compounded by the Commission’s new, tougher forbearance standards. A near-insurmountable forbearance standard applied to all Title II services likely would further undermine the legal basis for the “Third Way” plan’s heavy reliance on forbearance. Conversely, subjecting prospectively reclassified Title II broadband Internet services to a separate forbearance standard is conceptually at odds with Title II reclassification itself.

  
  
  
• Crime, Justice & the Law
  

  The Pursuit of Justice: The Law and Economics of Legal Institutions

  By Edward J. Lopez, Robert D. Tollison, Independent Institute
  
  Book, 07/13/2010
  

  The Pursuit of Justice is an analysis of the bureaucratization and politicization of the U.S. legal system and how the law works in practice rather than in theory. The book looks specifically at how decision makers in the law—judges, lawyers, juries, police, forensic experts, and more—respond to economic incentive structures. By looking at a range of important legal rules, their associated incentive effects, and the resultant outcomes, the authors here shed light on how perverse incentives result in adverse outcomes, while also suggesting institutional reforms that would create a more just and efficient legal system.

  
  
  
• The Constitution/Civil Liberties
  

  Property Rights: Eminent Domain and Regulatory Takings Re-Examined

  By Bruce L. Benson, Independent Institute
  
  Book, 07/13/2010
  

  Property Rights explores the uses and abuses of eminent domain and regulatory takings in four areas: proposed constraints on the use of eminent domain, compensation issues in theory and practice, eminent domain from a public choice perspective, and the spillover costs of takings. This comprehensive book brings together a diverse group of scholars and experts to explain the implications of this decision. Contributors include the attorney who represented Susette Kelo before the U.S. Supreme Court, the legal scholar who wrote Regulatory Takings, and experts on land value determination, land-use policy, environmental regulation, regulatory policy, entrepreneurial activities, and economic behavior.

  
  
  
• Transportation/Infrastructure
  

  Public Transit in Washington

  By Randal O’Toole, Washington Policy Center
  
  Policy Brief, 07/13/2010
  

  Public transit is often portrayed as a low-cost, energy-efficient alternative to auto driving. In fact, transit is much more costly than driving, and requires huge subsidies to attract riders. Moreover, transit systems in the vast majority of American cities use more energy and emit more greenhouse gases than the average car. For every dollar collected in fares from transit riders, the average transit system in America requires more than $2 from taxpayers for operating subsidies plus more than $1 for capital improvements and maintenance. So it is not surprising that transit systems in Washington require large subsidies. What may be surprising is that many are more energy intensive and less environmentally friendly than a typical sports utility vehicle.

  
  
  
• National Security
  

  Verification and the New START Treaty

  By Paula DeSutter, The Heritage Foundation
  
  Heritage Lecture, 07/13/2010
  

  The Obama Administration is asserting that the New START arms control treaty with Russia has a “robust” verification regime, and that it is effectively verifiable. But it is certainly much less verifiable than the original START. The U.S. will know significantly less about current and future Russian missiles under New START, and the Russians will be able to do much to advance and expand their strategic forces. The consequences of circumvention or cheating are more dangerous and destabilizing in the absence of robust U.S. missile defenses.

  
  
  
• Elections, Transparency, & Accountability
  

  The Iranian Clergy’s Silence

  By Mehdi Khalaji, Hudson Institute
  
  Articles, 07/13/2010
  

  Over a year since Iran’s hotly disputed 2009 presidential elections and the subsequent violent crackdown on the opposition Green Movement, the Iranian regime is continuing its campaign to suppress and discredit Shiite clerics. Not unreasonably, Iranian democrats and others in the opposition expect Shiite religious scholars to react to these affronts and to defend their own against the Islamic regime. And yet, by and large the clerical establishment has remained silent against the regime’s attacks. What accounts for this silence of so many?

  
  
  
• Budget & Taxation
  

  Reforming the Sales Tax: Keep in Mind Liberty, Prosperity, and Sound Principles of Taxation

  By Roy Cordato, John Locke Foundation
  
  Spotlight, 07/12/2010
  

  Regardless of whether the existing base is changed, North Carolina’s sales tax rate is excessive. At a combined average state and local rate of 7.98 percent, North Carolina’s rate is virtually tied with Tennessee’s rate of 8 percent as the highest in the Southeast. But that is misleading since Tennessee has no income tax. And North Carolina’s rate is a full percentage point above the third highest, South Carolina. Furthermore, N.C.’s rate was well above Florida’s 6.8 percent, even though Florida, like Tennessee, has no income tax. North Carolina’s punitive sales tax rate imposes a tax penalty on living and doing business in the state when compared with the tax rates of surrounding states.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  California’s Unprecedented Green Chemistry Law Advances

  By Gene Livingston, Washington Legal Foundation
  
  Legal Opinion Letter, 07/12/2010
  

  With all deliberate speed, the California Department of Toxic Substance Control (DTSC) is moving forward to implement California’s unprecedented Green Chemistry law. DTSC proposes to enforce the regulation by requiring manufacturers to notify retailers that the manufacturer is in non-compliance and the product cannot be made available for use in California. This process raises enormous workability issues. Consumer stakeholders should monitor and consider the actions and the powers of the state attorneys general and the states as well as the CPSC and the federal government in their product safety planning, assurance, and remediation programs.

  
  
  
• Crime, Justice & the Law
  

  Global Warming Lawsuits: Poised For Supreme Court Hot List?

  By Victor E. Schwartz, Phil Goldberg, Christopher E. Appel, Washington Legal Foundation
  
  Legal Opinion Letter, 07/12/2010
  

  A fiery storm is brewing between federal trial and appellate courts over the propriety of lawsuits seeking to blame a select group of American companies for weather events allegedly caused by “global warming.” Four such lawsuits have been filed targeted at businesses associated with the production and use of energy in this country. The allegations are based on the following attenuated premise: U.S. companies, through operations or products, emitted gases that mixed together in the earth’s atmosphere with similar gases released from sources throughout the world; over many decades, these gases collectively built up and caused global warming; global warming has changed weather patterns, including making some storms more severe; these weather events are a public nuisance and cause weather-related injuries. Therefore, if these lawsuits are successful, a handful of American companies will be on the hook for money damages, injunctive relief, or abatement costs whenever plaintiffs, now or in the future, could suggest that their weather-related injuries were caused by global warming.

  
  
  
• Crime, Justice & the Law
  

  Influential Federal Court Mandate Daubert Analysis at Class Certification Stage

  By Jennifer L. Brown, Washington Legal Foundation
  
  Legal Opinion Letter, 07/12/2010
  

  The Seventh Circuit’s conclusion that a full Daubert v. Merrell Dow Pharms., Inc. analysis should be undertaken before a court relies on an expert’s opinion in determining class certification is a natural extension of the growing acknowledgment by the courts and the Rules Advisory Committee that class certification should only be permitted after a rigorous application of Rule 23’s requirements. It is only a matter of time before other federal appellate courts adopt this same conclusion.

  
  
  
• Budget & Taxation
  

  Approaches to Cutting Federal Spending

  By Chris Edwards, Cato Institute
  
  Testimony, 07/12/2010
  

  Unless today's massive deficit spending is reduced, the nation is headed for a fiscal calamity. The freedom and prosperity of young people will be crushed by debt piling up at over $1 trillion a year. Both parties are responsible for the deep fiscal hole we are in. The last president presided over the fastest annual average real growth in federal spending since Lyndon Johnson. The current president has embraced short-sighted and dangerous Keynesian economic theories, which favor large deficit spending. To some policymakers, the sorts of cuts discussed in this testimony will seem drastic. But rising debt will eventually force policymakers to make radical budget changes whether they like it or not. However, it would be better to make needed reforms now before the federal government's debt grows even larger.

  
  
  
• Elections, Transparency, & Accountability
  

  PennFuture’s Lobbying

  By Paul Chesser, Commonwealth Foundation for Public Policy Alternatives
  
  Policy Brief, 07/12/2010
  

  PennFuture (a.k.a. Citizens for Pennsylvania's Future), the organization founded by Pennsylvania Secretary of Environmental Protection John Hanger over 10 years ago, frequently criticizes the lobbying by traditional energy industries. But a close look at the environmental activist group shows at least questionable and hypocritical, if not unethical or illegal, advocacy practices.

  
  
  
• Health Care
  

  Bad Medicine: A Guide to the Real Costs and Consequences of the New Health Care Law

  By Michael D. Tanner, Cato Institute
  
  White Paper, 07/12/2010
  

  For better or worse, President Obama's health care reform bill is now law. The Patient Protection and Affordable Care Act represents the most significant transformation of the American health care system since Medicare and Medicaid. It will fundamentally change nearly every aspect of health care, from insurance to the final delivery of care. The length and complexity of the legislation, combined with a debate that often generated more heat than light, has led to massive confusion about the law's likely impact. In short, the more we learn about what is in this new law, the more it looks like bad news for American taxpayers, businesses, health-care providers, and patients.

  
  
  
• Economic and Political Thought
  

  Trial by Battle

  By Peter Leeson, Mercatus Center
  
  Working Paper, 07/12/2010
  

  For over a century England’s judicial system decided land disputes by ordering disputants’ legal representatives to bludgeon one another before an arena of spectating citizens. The victor won the property right for his principal. The vanquished lost his cause and, if he were unlucky, his life. People called these combats trials by battle. This paper investigates the law and economics of trial by battle. In a feudal world where high transaction costs confounded the Coase theorem, the paper argues that trial by battle allocated disputed property rights efficiently. It did this by allocating contested property to the higher bidder in an all-pay auction. Trial by battle’s auctions permitted rent seeking. But they encouraged less rent seeking than the obvious alternative: a first- price ascending-bid auction.

  
  
  
• Information Technology
  

  Public Interest Comment on the Connect America Fund

  By Jerry Ellig, Mercatus Center
  
  Public Interest Comment, 07/12/2010
  

  Creation of the Connect America Fund offers the Federal Communications Commission the opportunity to make a clean break with past subsidy disbursement practices that were often ineffective, inefficient, and unaccountable for achieving the outcomes articulated in the 1996 Telecommunications Act. Competitive procurement auctions would allow the FCC to achieve the greatest possible improvement in broadband availability or subscribership with limited subsidy dollars.

  
  
  
• The Constitution/Civil Liberties
  

  Testimony on the Appointment of Elena Kagan to the Supreme Court of the United States of America

  By David B. Kopel, Stephen P. Halbrook, Cato Institute
  
  Testimony, 07/12/2010
  

  In regard to Second Amendment issues, Senators should carefully consider whether Elena Kagan will be a Supreme Court Justice like Hugo Black. In other words, can the Justice overcome a prejudiced background and professional record in order to become a Justice who will fully protect constitutional rights? There are many items in Ms. Kagan’s twentieth century legal record which raise very troubling concerns that she would not fully protect the Second Amendment rights of Americans, but instead would be willing to stretch the law in order to promote oppressive anti-gun laws and gun bans.

  
  
  
• Economic and Political Thought
  

  Efficient Plunder

  By Peter Leeson, Alexander Nowrasteh, Mercatus Center
  
  Working Paper, 07/12/2010
  

  Self-interest seeking leads stronger individuals to plunder weaker ones. But could it also lead them to do so in ways that minimize plunder’s social inefficiency? This paper argues that when contracts between enemies are enforceable and transaction costs are low, plunderers and their victims benefit from trade that facilitates the former’s ability to plunder the latter. Coasean “plunder contracts” transform plunder’s social costs—resources invested in violent appropriation and resources lost in violent conflict over ownership—into private benefits for plunderers and their victims. A significant portion of the wealth that plunder would otherwise destroy is preserved instead. We call this result “efficient plunder.”

  
  
  
• Foreign Policy/International Affairs
  

  Another Feeble Response to North Korean Aggression

  By Bruce Klingner, The Heritage Foundation
  
  WebMemo, 07/12/2010
  

  The U.N. Security Council’s timid reaction to North Korea’s blatant and heinous attack of a South Korean naval ship is extremely disappointing—though not unexpected. Given the U.N.’s failure to respond effectively to North Korean aggression, the rest of the world—lead by the U.S. and South Korea—should now take the initiative. Failure to do so will only embolden Pyongyang and its Chinese enablers. The U.S. should signal it will take all necessary measures to defend its critical ally during this time of heightened tensions.

  
  
  
• Foreign Policy/International Affairs
  

  The 2010 Preparatory Committee for the U.N. Arms Trade Treaty: Five Dangers the U.S. Must Avoid

  By Theodore Bromund, The Heritage Foundation
  
  WebMemo, 07/12/2010
  

  The Obama Administration’s decision to participate in the negotiations on the Arms Trade Treaty was unwise. These negotiations are based on the mistaken premise that the reason why terrorists have access to weapons is because of inadequate national legal controls on exports. In reality, terrorists have access to weapons because states, or state-dominated institutions, arm them. The problem is not a shortage of law; it is a shortage of states that do not fulfill their existing obligations not to supply terrorists with weapons. That is the reason why the treaty will fail and why its negotiation—which must be undertaken in pretended partnership with these states—poses so many dangers to the liberties of American citizens and the interests of the U.S.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  The Cap and Trade Handbook

  By James M. Taylor, Heartland Institute
  
  Booklet, 07/12/2010
  

  James M. Taylor, senior fellow for environment policy at The Heartland Institute, explains in this brief, colorfully illustrated booklet that cap-and-trade legislation would be enormously costly and is entirely unnecessary. So if not cap-and-trade, what should be done about global warming? He offers five suggestions.

  
  
  
• Economic and Political Thought
  

  Hayek on Spontaneous Order and Constitutional Design

  By Scott A. Boykin, Independent Institute
  
  The Independent Review, 07/08/2010
  

  There are few certainties in a world driven by competition. Hayek’s ideal constitution provides a social arena in which individuals and groups may compete, but it accordingly supplies little assurance of the cultural and hence the political future. His constitutional thought suggests that democratic liberalism requires for its persistence a cultural disposition favoring limited government. His evolutionary theory presents the outline of a process through which liberal rules might emerge, but it does not predict that these rules will persist indefinitely, and he recognizes that liberalism may contain self-destructive tendencies. These problems underscore that government necessarily interferes with the spontaneous social processes on which Hayek’s evolutionary social theory depends. His message is that constitutional mechanics, though important, are inadequate to sustain limited government and that liberalism ultimately depends on circumstances over which we have no control.

  
  
  
• Budget & Taxation
  

  Illinois Department of Commerce and Economic Opportunity

  By Illinois Policy Institute, Illinois Policy Institute
  
  Spotlight on Spending, 07/08/2010
  

  Despite Department of Commerce and Economic Opportunity (DCEO)’s intended mission of fostering economic activity, Illinois compares poorly with most states on economic growth. The American Legislative Exchange Council ranked Illinois 48th for Economic Performance and 47th for Economic Outlook in 2010. Additionally, Illinois ranked 48th for Non-Farm Payroll Employment Growth from 1998-2008, and 48th for Absolute Net Migration from 1999-2008. These are not promising rankings, and they clearly show the DCEO is not fulfilling its mission. The DCEO’s activity overlaps services provided by the private sector, and many of its grants are of dubious value. Eliminating the DCEO would provide one much-needed route to ending unnecessary, wasteful spending of taxpayers’ dollars in Illinois.

  
  
  
• Budget & Taxation
  

  Illinois’s Employer Training Investment Program

  By Illinois Policy Institute, Illinois Policy Institute
  
  Spotlight on Spending, 07/08/2010
  

  Instead of picking winners and losers through special Employer Training and Investment Program grants, the state should focus on making the entire business environment in Illinois more competitive with the rest of the country. Although the training program likely has good intentions, the state should not be handing out tax dollars to favored businesses for employee training. Instead, state government can help spur the business climate in Illinois by creating a more welcoming environment, which would entail reforming workers’ compensation, the minimum wage, and eliminating or cutting back the state’s long list of licensing and regulatory requirements. All of these areas create unnecessary barriers to Illinois’s businesses and entrepreneurs.

  
  
  
• Budget & Taxation
  

  Illinois State Energy Subsidies—Picking Winners and Losers with Tax Dollars

  By Illinois Policy Institute, Illinois Policy Institute
  
  Spotlight on Spending, 07/08/2010
  

  Illinois state government is unnecessarily picking winners and losers, distorting energy prices, and driving up overall government spending by awarding tax dollars to certain energy sectors via special government programs. New subsidies for energy projects should not be enacted, and current subsides need to be removed. These programs divert funding from other critical state services, and the government needs to prioritize spending on core government services—especially when facing a significant budget deficit. Across Illinois, private companies provide funding for their own marketing, promotion, and research and development; firms in the energy industry should be treated in the same way.

  
  
  
• Economic Growth
  

  Minimum Wage: Hurting More than Helping

  By Illinois Policy Institute, Illinois Policy Institute
  
  Policy Brief, 07/08/2010
  

  Illinois’s minimum wage, already high at $8.00 an hour, is set to increase by another 25 cents on July 1, 2010. This ill-timed hike in the minimum wage will hurt low-skilled workers and the small business owners who want to employ them. With each of Illinois’s neighboring states having a lower minimum wage, hiring new workers in Illinois makes less business sense for entrepreneurs watching the bottom line. Illinois should not increase its minimum wage rate to $8.25. A preferable option would include at least keeping it at the current rate. Even better, the state should reduce it to the minimum rate set by the federal government.

  
  
  
• Budget & Taxation
  

  Budget Cheat Sheet: Reading Between the Lines of Governor Quinn’s Budget Address

  By Illinois Policy Institute, Illinois Policy Institute
  
  Policy Points, 07/08/2010
  

  Illinois Governor Pat Quinn’s new budget “fix” indicates he’s living in a fiscal fairy tale. His spending adjustment recommendations do not come remotely close to balancing the budget, and he has failed to offer clean break from the state’s perpetual fiscal mismanagement.

  
  
  
• Education
  

  Survey of End-of-Course Test Questions

  By Terry Stoops, John Locke Foundation
  
  Spotlight, 07/08/2010
  

  The Department of Public Instruction (DPI) should not be in the testing business. State education officials should replace end-of-year and end-of-course tests with an independent, field-tested, and credible national test of student performance, such as the Iowa Test of Basic Skills, the Stanford 10, or the California Achievement Test. If state education officials refuse to adopt a new national or norm-referenced testing program, DPI should create a test question review board consisting of college and university faculty and subject-area experts from the private and public sectors. The release of the 2008-2009 state tests is a good start. DPI should continue to conduct a more transparent and accountable testing program, including an online data tool that allows users to analyze test questions based on student responses.

  
  
  
• Budget & Taxation
  

  Essential Elements of Public Employee Pension Reform

  By James Madison Institute, James Madison Institute
  
  Issue Analysis, 07/08/2010
  

  In many of Florida’s local jurisdictions, public employees’ salaries, benefits, and pensions now far exceed those available to most employees in comparable jobs in the private sector whose taxes support the government. Although maintaining the health of the Florida Retirement System must remain the principal focus of state officials, including the Legislature, the state government cannot be unmindful of the declining fiscal health of those local governments that entered into binding collective bargaining agreements that include ruinously unsustainable pension costs. To the extent that these problems are remediable by statute, the Legislature needs to act this year to place those local governments on a glide path to fiscal responsibility.

  
  
  
• Regulation & Deregulation
  

  One More Thing America Must Learn from Europe: Europe’s Open Skies Versus America’s Closed Market

  By Mark Milke, Kenneth P. Green, American Enterprise Institute
  
  The American, 07/08/2010
  

  During this summer travel season, the United States could learn a lesson from Europe: how to make flying cheaper. In the European Union, any EU-based airline from any member country can pick up and drop off passengers anywhere within the Union, regardless of whether the airline’s home base is in Ireland, Spain, France, Germany, Britain, or some other EU-member nation. The competition that freedom fosters helps control costs, and offers greater consumer choice in both airline and route.

  
  
  
• Crime, Justice & the Law
  

  Oklahoma’s Tort System ‘Salvageable’

  By Lawrence J. McQuillan, Hovannes Abramyan, Oklahoma Council of Public Affairs
  
  Current Perspective, 07/08/2010
  

  An efficient tort liability system is an important ingredient for a thriving free-enterprise economy. It ensures that businesses and individuals have proper incentives to produce safe products and provide safe services, and that true victims are fully compensated. The state that has the best tort rules on the books-and that will be heading in the right direction if the rules are fully implemented-is Oklahoma, followed by Texas, Ohio, Colorado, and Mississippi. States that implement meaningful tort reform challenge their neighbors to do the same or be at a competitive disadvantage in the battle to attract people and capital. Oklahoma's 2009 reforms, for example, were largely driven by the earlier reforms adopted in neighboring Texas.

  
  
  
• Economic and Political Thought
  

  The Spirit of Independence: The Social Psychology of Freedom

  By Lee Harris, American Enterprise Institute
  
  The American, 07/08/2010
  

  We are in the midst not of a war of ideas, or even a cultural war, taken in its usual superficial sense. We are fighting an old battle all over again. On the one side stand the natural libertarians, furiously insistent on defending their integrity as ethical agents. On the other side stand those in power who naturally find such people troublesome nuisances, and who would prefer to rule a society made up of individuals who have been properly educated to know they were really incompetent to manage their own affairs, and to regard themselves as the victims of circumstances. Are natural libertarians destined to perish from the earth along with their cherished cultural and religious traditions, pushed aside by those who claim to champion progress but who in fact promote learned helplessness in the general population, however benevolent their intentions? This question only time can answer.

  
  
  
• Elections, Transparency, & Accountability
  

  The National Academy of Blacklists

  By Kenneth Green, American Enterprise Institute
  
  The American, 07/08/2010
  

  Early this year, the National Academy of Sciences issued a blatant call for a specific climate policy, going far beyond serving as an objective voice of scientific explication. And now it has allowed a badly flawed study in its flagship publication that effectively creates a blacklist, in order to delegitimize scientists who might disagree with a vague “consensus” position on climate-change science. With such antics, the NAS risks losing its credibility, which is really all it has to offer. Someone needs to publicly clean house at the NAS, washing the institution’s hands of public policy pronouncements and renouncing efforts to turn them into a propaganda organ for climate alarmists. The alternative will be declining trust in the NAS, and the further erosion of the public’s belief in scientific pronouncements in general.

  
  
  
• Crime, Justice & the Law
  

  The Nation’s Worst State Attorneys General

  By Hans Bader, Competitive Enterprise Institute
  
  Issue Analysis, 07/08/2010
  

  Many state attorneys general across the nation conscientiously fulfill their duties every day. However, others have failed to heed the limits on their own power. Instead of focusing on their historical function of defending state agencies in court and providing legal advice, they have chosen to use lawsuits as a weapon by which to undemocratically impose new regulations on the public. In the process, they have usurped the lawmaking authority of state legislatures and Congress. To satisfy their ambitions, and enrich political allies, they have imposed great costs on our nation’s economy and system of government, while fostering corruption, and undermining constitutional checks and balances.

  
  
  
• Education
  

  Examining Decades of Growth in K-12 Education: A Close Look at Spending and Achievement Trends

  By Brooke Dollens Terry, Brittany Wagner, Bill Peacock, Texas Public Policy Foundation
  
  Report, 07/08/2010
  

  Texas public education spending has skyrocketed over the last 20 years without a corresponding increase in student achievement. Total Texas public education expenditures are higher than most policymakers realize, as total education spending includes debt and building costs. Texas has more public school employees than any other state, and the number of Texas school personnel has grown at a much higher rate than student enrollment.

  
  
  
• Transportation/Infrastructure
  

  Driven to Spend: Funding the State’s Transportation Needs Without Raising Taxes

  By Talmadge Heflin, James Quintero, Texas Public Policy Foundation
  
  Policy Perspective, 07/08/2010
  

  Texas’s transportation system faces significant challenges in the coming years as the result of explosive population growth, current infrastructure maintenance requirements, and the need to plan future projects. Some argue that the best way to solve the state’s looming transportation troubles is through higher taxes and fees; but consumers and taxpayers, particularly in today’s recession weary environment, are looking for more responsible, innovative alternatives that maximize existing resources and directly address the problem of congestion. It is recommended that the Legislature adopt an approach that ends diversions; re-directs state government resources; re-prioritizes existing local sales taxes; allocates funds based on their ability to reduce congestion; and implements transparency reforms to identify inefficiencies and better educate the public.

  
  
  
• Budget & Taxation
  

  The Tax Hike on Carried Interest

  By Kevin A. Hassett, Alan D. Viard, American Enterprise Institute
  
  Tax Policy Outlook, 07/08/2010
  

  Congress is considering a bill that would increase taxes on the carried interest managers of private equity funds, hedge funds, and real estate funds receive. Although the arguments commonly made for the proposed change seem plausible at first glance, most of their plausibility disappears upon further scrutiny because most of these arguments are based on misunderstandings about carried interest and its tax treatment. It would be unwise to adopt this tax increase on investment when there is no compelling case that it will produce a more efficient allocation of capital.

  
  
  
• International Trade/Finance
  

  Tracking Chinese Investment: Western Hemisphere Now Top Target

  By Derek Scissors, The Heritage Foundation
  
  WebMemo, 07/08/2010
  

  The expansion of Chinese activity in the Western Hemisphere, especially, will provoke much gnashing of teeth. There is an obvious means to counter this challenge: strengthen the American economic and political presence by ratifying the Colombia and Panama free trade agreements and seek other partners. When China is involved, it is well recognized that better economic relations bring the possibility of greater political influence. When it is time for the U.S. to act, the same fact tends to be forgotten. Concerns about American influence lost to increased Chinese investment and business activity should be addressed by encouraging the expansion of American economic activity, from investment in Ivory Coast to trade with Taiwan.

  
  
  
• Economic Growth
  

  The Rising Threat of Deflation

  By John H. Makin, American Enterprise Institute
  
  Economic Outlook, 07/08/2010
  

  As we enter the second half of 2010—the “postcrisis” year—while markets have been obsessed with Europe’s debt crisis, they have failed to notice potentially more ominous developments. The United States and Europe are heading toward—and Japan already suffers from—deflation, a classic prolonger of crises that boosts the real burden of debt and crushes profit margins. Historically, subsequent to stimulus, the damaged financial sector, unable to supply credit; a jump in the precautionary demand for cash; and a persistent overhang of global production capacity leaves deflation pressure intact. The G20’s newfound embrace of fiscal stringency only adds to the extant deflation pressure.

  
  
  
• Education
  

  Fostering Opportunity and Improving Achievement: The Benefits of a Foster-Care Scholarship Program in California

  By Vicki E. Murray, Evelyn B. Stacey, Pacific Research Institute
  
  Policy Brief, 07/08/2010
  

  Adopting a Florida-style foster-care scholarship program is academically and fiscally responsible education reform for California. Providing parents of foster children with educational scholarships worth what the state would pay district schools or institutions to educate them, similar to what Florida does under its McKay Scholarship Program, could help mitigate such perverse financial incentives by leveling the playing field between parents and educational institutions. Such a program has the added benefit of introducing powerful incentives to provide children with the services they need or risk losing them and their education dollars. As Florida shows, letting parents choose the schools they believe are best for their children better ensures they receive the services they need.

  
  
  
• Information Technology
  

  Lieberman’s Cyberspace Protection Bill: Enhancing Cybersecurity, or Establishing a New Uber-Authority?

  By James E. Dunstan, Progress & Freedom Foundation
  
  Progress Snapshot, 07/08/2010
  

  The Senate Homeland Security and Government Affairs Committee recently voted Senator Joe Lieberman’s Protecting Cyberspace as a National Asset Act of 2010 out of Committee. Though offering much-needed reform to the Federal government’s cybersecurity system, this nearly 200-page blunderbuss of a bill sweeps private “critical infrastructure” providers into a new bureaucratic morass. Contemplating the bill’s unintended consequences should send shivers up the spines of anyone concerned with individual rights and freedoms and about the dangers of unbridled government powers, especially in the hands of the Executive Branch, which seems to grow ever more imperial with every new President, regardless of party.

  
  
  
• Information Technology
  

  On Our Way to the Third Way: The FCC’s Notice of Inquiry on Internet Regulation

  By Charles H. Kennedy, Progress & Freedom Foundation
  
  Progress on Point, 07/08/2010
  

  At its open meeting held on June 17, 2010, the Federal Communications Commission (FCC) adopted a Notice of Inquiry (NOI) that asks for comment on the agency’s authority to regulate broadband Internet access service. The NOI asks for comment on three possible ways of asserting FCC jurisdiction over the Internet, but only one—the so-called “Third Way” approach—seems really to be on the table. Reclassification under the “Third Way” will be the beginning of the Internet’s “Lost Decade” (or more) of stymied investment, innovation, and job creation as all sides do battle over the legality of reclassification and its implementation.

  
  
  
• Information Technology
  

  Comments on Implementation of the Children’s Online Privacy Protection Rule

  By John B. Morris Jr., et al., Progress & Freedom Foundation
  
  Public Interest Comment, 07/08/2010
  

  The Federal Trade Commission’s implementation of the Children’s Online Privacy Protection Act (COPPA) aims to help parents control what information is collected online from, and potentially shared by, their children under the age of thirteen. COPPA has been successful in limiting the amount of personal information collected from children online and in increasing parental involvement in children’s online activities. This success is due in large part to the fact that both the Act and the Rule are narrowly drawn and clearly indicate which web sites and services are covered by the regulations. Expanding COPPA to cover older minors or altering the COPPA Rule’s knowledge standard would greatly increase the number of websites that are bound by its requirements, and significantly increase the uncertainty of the Act’s application and its burden on protected speech. This would result in the collection of more information about children, their parents, and potentially every other Internet user. Thus, COPPA expansion would, ironically, transform a rule intended to protect privacy into one that would create more privacy problems than it solves without further advancing the privacy or safety of children online.

  
  
  
• National Security
  

  Classrooms for Security: Harnessing Academia to Keep America Safe

  By James Carafano, Jena Baker McNeill, Richard Weitz, The Heritage Foundation
  
  Backgrounder, 07/08/2010
  

  Academic institutions have become a core member of the national homeland security enterprise. They help strengthen U.S. homeland security in several respects. First, they promote basic skills useful for averting and managing domestic emergencies for current and future professionals. As in many areas, the ability to think critically, communicate clearly, and learn new skills and information rapidly are essential characteristics of effective homeland security responders. Second, faculty and other members of the academic community conduct detailed basic and applied research in homeland security–related disciplines and contribute to innovation and analysis. Third, besides educating students, training current professionals, and fostering research, academia assists in homeland security planning and exercises and the sharing of best practices.

  
  
  
• National Security
  

  Experts: New START is a Non-Starter

  By Peter Brookes, Owen Graham, The Heritage Foundation
  
  WebMemo, 07/08/2010
  

  As the U.S. strategic nuclear arsenal is reduced through New START, critics and proponents of nuclear zero both agree that national security demands that verification become more, not less, reliable. The Obama Administration asserts that this treaty has a robust verification regime. To paraphrase Ronald Reagan, this is just not so. And while there is no perfect verification, it is now clear that New START’s verification regime is not even close to that of the original START treaty.