Recent Policy Studies

• Monetary Policy/Financial Regulation
  

  Evaluating Consumer Access to Short-Term Lending

  By Ryan Brannan, Texas Public Policy Foundation
  
  Policy Perspective, 04/15/2011
  

  As credit markets continue to tighten, it is important for Texas consumers to have access to a variety of financial options. Critics fail to look at the all sides of the issue and take into account the alternatives consumers face. However, consumers in need of short-term loans and credit are generally aware of the alternatives to taking out loans, such as skipping payments or bouncing checks. They understand that a competitive and vibrant short-term credit market provides them consumer choice and access to needed financial services. There is and will continue to be a market demand for small, short-term loans. The Legislature should not restrict access to these.

  
  
  
• Crime, Justice & the Law
  

  Returning Justice to the Judicial System: Procedural Protections from Frivolous Litigation

  By Ryan Brannan, Texas Public Policy Foundation
  
  Policy Perspective, 04/15/2011
  

  The current system of tort litigation is expensive and should be reformed. Americans go to court more often—and at more cost—than any other people in the world. The purpose of tort reform is to reduce the amount of meritless—or frivolous—litigation and excessive awards. A loser-pays statute would overcome high transaction costs and ensure that all tort plaintiff s with meritorious claims have access to the judicial system. Such a statute would decrease the cost of litigation and ensure that only meritorious claims are heard. Plaintiff s’ attorneys would be disincentivized from bringing fraudulent and abusive lawsuits. Implementing a loser-pays system, along with the other procedural changes recommended in this paper, would reduce the high cost of litigation today and significantly improve access to the Texas courts.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Testimony before the House Select Committee on State Sovereignty Regarding HB 2545: Regional Air Quality Compact

  By Mario Loyola, Texas Public Policy Foundation
  
  Testimony, 04/15/2011
  

  Under the Obama administration, the Environmental Protection Agency (EPA) has abused its authority to approve and disapprove state implementation plans (SIPs) in order to take over traditional state functions. Texas’s HB 2545 suspends EPA’s SIP-approval authority within the member states, and replaces it with a Regional Air Quality Commission. By creating a mechanism for state cooperation and collaboration on air quality issues, the Regional Air Quality Commission will promote both state compliance with the Clean Air Act and competitive best practices among the member states in attaining air quality. The Commission would also take over EPA’s current function of providing guidance for compliance with the Clean Air Act, which EPA has also abused in violation of statute, the U.S. Constitution, and the express wishes of Congress.

  
  
  
• Health Care
  

  Can Oklahoma Create a “Free Market” Health Insurance Exchange Using the $54 Million Early Innovator Grant?

  By Jason Sutton, Jonathan Small, Oklahoma Council of Public Affairs
  
  Memorandum, 04/15/2011
  

  On February 25, Oklahoma leaders announced that the state would accept a $54.6 million “Early Innovator” grant from the U.S. Department of Health and Human Services (HHS). The “Early Innovator” grants were authorized under the Patient Protection and Affordable Care Act (hereafter “Affordable Care Act”) to begin developing the information technology infrastructure for the “health benefits exchanges” as required under the Act. To their credit, Oklahoma’s leaders have, to date, been clear that their intention is to take the federal funds and create a health insurance exchange that empowers consumer choice through real competition—in essence, an exchange unlike those required under the Affordable Care Act. However, a serious question remains: Does the “Early Innovator” grant permit Oklahoma to use this $54 million to create the type of “patient centered,” “freemarket, conservative” insurance exchange state leaders are pursuing? The short answer to that question: highly unlikely.

  
  
  
• Economic Growth
  

  Mattress Investing Revisited

  By Pamela Villarreal, National Center for Policy Analysis
  
  Brief Analysis, 04/15/2011
  

  The 2009 NCPA Brief Analysis, “Is the Mattress a Good Place for Money?,” compared returns from different savings strategies from 2008 to 2009. The result? Even during a tumultuous year for the market, a stock index fund outperformed a bond index fund, a money market account or simply hiding the money in the mattress, so to speak. Revisiting the downturn, would an investor have been better off if he had steadily contributed to an equity fund from December 2008 through December 2010? A comparison of returns from some of the alternatives indicates he would have been better off staying in the market.

  
  
  
• Budget & Taxation
  

  From Pleasant Deficit Spending to Unpleasant: Sovereign Debt Crises

  By Lawrence H. White, Mercatus Center
  
  Working Paper, 04/15/2011
  

  Economists have long disagreed about the costs and benefits of government budget deficits and debt. Following the Second World War, a clash between Keynesian and orthodox fiscal policy views arose. The debate waned as fiscal Keynesianism won the day, then resumed as monetarist and new classical economists challenged Keynesian thinking in the 1970s. Economists became largely skeptical about the potential for actively using deficit spending to improve macroeconomic outcomes. With the sharp recession of 2007–09 the Keynesian side of the debate suddenly revived, and today the clash continues. On the side of greater deficit spending in the recession are contemporary fiscal Keynesians, who worry that government spending and debt growth must be too small when there are high rates of unemployment. On the opposite side are contemporary new classical and Austrian economists, who dispute the Keynesian arguments and worry about rapidly growing government financed by rapidly mounting public-sector debts.

  
  
  
• Budget & Taxation
  

  Lessons from the 1986 Tax Reform Act: What Policy Makers Need to Learn to Avoid the Mistakes of the Past

  By Jason J. Fichtner, Mercatus Center
  
  Working Paper, 04/15/2011
  

  The 1986 Tax Reform Act (TRA86) was designed to improve three aspects of the tax code: efficiency, equity, and simplicity. The debate leading up to passage of TRA86 was contentious and, like today, tax reform was seen as being politically impossible. However, TRA86 achieved significant bipartisan support with final passage in the Senate on a 97–3 vote. At the time, TRA86’s passage seemed like a great success for tax reform. However, taxpayers today would be hard pressed to find the aspects of efficiency, equity, and simplicity that were improved with passage of TRA86. What happened over the past quarter of a century? How quickly did the reforms of TRA86 unravel and why? This paper examines the act’s goals of efficiency, equity, and simplicity, finding the lasting successes and failures of TRA86. Those wishing to reform the tax system today would be wise to learn from the past.

  
  
  
• Health Care
  

  Transforming Medicare into a Modern Premium Support System: What Americans Should Know

  By Robert Moffit, Kathryn Nix, The Heritage Foundation
  
  WebMemo, 04/15/2011
  

  House Budget Committee Chairman Paul Ryan’s budget proposal for fiscal year 2012 would transform the Medicare program into a “premium support” system. Under the Ryan approach, the federal government would make a direct financial contribution to Medicare enrollees’ health care coverage, just as it does today for federal workers and retirees in the popular Federal Employees Health Benefits Program (FEHBP), the nation’s largest and most successful example of a premium support system. The advantage of a premium support system is that it enables enrollees to apply the government’s contribution to the health plan of their choice, providing them a broad range of integrated health care options. Premium support would introduce intense competition in a consumer-driven market, which has historically slowed the growth of health care costs and increased patient satisfaction.

  
  
  
• Budget & Taxation
  

  Taxes Are Not Too Low: It’s the Spending, Stupid

  By The Heritage Foundation, The Heritage Foundation
  
  Fact Sheet, 04/15/2011
  

  Tax hikes cannot fix the deficit. If Congress, rather than borrowing or cutting spending, raised income taxes by the $1.3 trillion necessary to pay for 2010 deficit spending, it would need to more than double income tax collections. President Obama’s tax hike plan will increase taxation, burden small business owners, kill economic growth, and bolster increased spending. Ultimately, Obama’s tax hike plan will propel America’s journey down an unsustainable path.

  
  
  
• Budget & Taxation
  

  President Obama’s Disconnect on the Defense Budget

  By Baker Spring, The Heritage Foundation
  
  WebMemo, 04/15/2011
  

  In the course of his April 13 speech on the fiscal crisis, President Obama took the opportunity to renounce his own defense budget, which he unveiled only two months ago. According to the White House, he is seeking $400 billion in additional defense cuts between now and fiscal year (FY) 2023. This means an average of over $33 billion per year. In his February statement on his FY 2012 budget submission, the President recognized the need to exempt national security spending, including the narrower category of defense spending, from a freeze on other discretionary spending accounts. Even then, the President’s five-year defense budget proposal from February falls far short of what is required to sustain U.S. security commitments around the world.

  
  
  
• The Constitution/Civil Liberties
  

  Supreme Silence

  By Richard A. Epstein, Hoover Institution
  
  Defining Ideas, 04/15/2011
  

  On April 4, 2011, the United States Supreme Court held in Arizona Christian School Tuition Organization v. Winn, by a narrow five-to-four majority, that Arizona taxpayers did not have “standing” to challenge a state law that gives tax credits for contributions made to School Tuition Organizations (STOs). This technical standing issue does not appear to have any political valence, but appearances can deceive. This issue gave rise to two indignant editorials, one from the Wall Street Journal that applauded the decision on the ground that it insulated religious institutions from judicial attack. The other was from the New York Times and it denounced the decision on the same ground. But both these editorials get matters wrong to the extent that they eagerly conflate the standing issue with a decision on the merits of the case. This article discusses both the standing issue and the merits of the case.

  
  
  
• The Constitution/Civil Liberties
  

  Caveat Vendor

  By Clint Bolick, Hoover Institution
  
  Defining Ideas, 04/15/2011
  

  When aggrieved entrepreneurs turn to the courts for protection, they almost always lose. Unlike when other constitutional rights such as freedom of speech are involved, courts apply to economic regulations the so-called “rational basis” test, under which the government prevails if the law has a rational basis. But the test is a misnomer because in most instances it requires that the government prove neither a basis for its actions nor one that is rational. Thus the perverse irony that in a nation doctrinally committed to opportunity, economic liberty occupies the basement of our constitutional pantheon.

  
  
  
• Foreign Policy/International Affairs
  

  Dodgy Deutschland

  By Russell A. Berman, Hoover Institution
  
  Defining Ideas, 04/15/2011
  

  When the United Nations Security Council adopted Resolution 1973 authorizing military action in Libya, the first casualty took place neither in beleaguered Benghazi nor in Ghadafi’s Tripoli but in the very heart of the trans-Atlantic alliance. The German decision to abstain from the vote and, in effect, to side with Russia and China, alongside Brazil and India, represented a break with the foreign policy tradition that had prevailed for decades—since the founding of the Federal Republic of Germany in 1949. As an episode in contemporary political history, the German abstention on Libya is rich in implications. It sheds light on fault lines in the western alliance. It teaches a lesson about the importance of American leadership (and the consequences of its absence). And it offers important insights into aspects of Germany’s political culture, which will remain influential long after the Libyan war.

  
  
  
• Foreign Policy/International Affairs
  

  Jasmine in the Middle Kingdom

  By Dale Swartz, American Enterprise Institute
  
  Asian Outlook, 04/15/2011
  

  China’s version of the Arab world’s “Jasmine Revolution” was a complete failure. Online calls for protests against Communist Party rule have elicited little response from would-be protesters. Yet Beijing’s reaction was swift and overwhelming—harassing reporters, jailing dissidents, and ramping up its already-aggressive censorship of the Internet. Such tactics have left those both inside and outside the country puzzled. Why are China’s leaders overreacting? Maybe they are not. The factors underlying this movement could prove lethal to the regime if left unaddressed. Future challenges will make tackling the problem even more difficult.

  
  
  
• Health Care
  

  Do Health Reform and Malpractice Reform Fit Together?

  By David Hyman, William M. Sage, American Enterprise Institute
  
  Working Paper, 04/15/2011
  

  The Patient Protection and Affordable Care Act’s (PPACA) omission of malpractice reform was a missed opportunity to secure the support of physicians for payment reform and delivery-system transformation. The latter reforms will not succeed without the willing participation of physicians. Reform that addresses the legitimate malpractice fears of physicians can only help. To be sure, the politics of malpractice warrant caution. In malpractice circles, special interests frequently pose as general ones. Beyond the health care sector, business or trial-lawyer constituencies may exploit medical malpractice policy for strategic advantage in an overall civil justice agenda. Within the health care industry, focused commercial interests such as existing liability carriers may seek to protect favored positions. The real issue is what we want our health care system and our malpractice system to do when working together. Modifications to both should be undertaken with that question in mind.

  
  
  
• Foreign Policy/International Affairs
  

  The Status Quo Fatigue

  By Leon Aron, American Enterprise Institute
  
  Russian Outlook, 04/15/2011
  

  In Moscow, a striking contrast exists between signs of economic revival after the 2008-2009 crisis and the general pessimism among intellectuals, opposition leaders, top analysts, entrepreneurs, and media figures. An investigation of this paradox points to several explanations. Unlike a few years ago, there is a pervasive sense that the political and economic model Vladimir Putin offered the country is nearly exhausted. Disillusionment with President Dmitri Medvedev’s ability to translate liberal rhetoric into action and implement meaningful reforms adds to the despondence. While the elite’s rapidly diminishing loyalty to the Kremlin is by no means a sign of an imminent crisis, it is a necessary and significant component of any radical change in the future. At the moment, the circumstances point to the gradual erosion of legitimacy and political institutions—or a sudden collapse of the regime, like the recent Egyptian antiauthoritarian revolt.

  
  
  
• Health Care
  

  The New Health Care Law’s Effect on State Medicaid Spending: A Study of the Five Most Populous States

  By Jagadeesh Gokhale, Cato Institute
  
  White Paper, 04/15/2011
  

  Unless it is repealed, the Patient Protection and Affordable Care Act (PPACA) of 2010 promises to increase state government obligations for Medicaid by expanding Medicaid eligibility and introducing an individual health insurance mandate for all U.S. citizens and legal permanent residents. This study estimates and compares potential increases in Medicaid expenditures from PPACA by the five most populous states: California, Florida, Illinois, New York, and Texas. State Medicaid spending is projected to increase considerably even without PPACA in California, Florida, and Texas, with smaller increases in Illinois and New York. With PPACA, projected spending is actually reduced for California, while spending increases are positive and large for Florida and Texas. Both Illinois and New York have the potential for considerably higher enrollments and increased expenditures.

  
  
  
• International Trade/Finance
  

  The Trade-Balance Creed: Debunking the Belief that Imports and Trade Deficits Are a “Drag on Growth”

  By Daniel Griswold, Cato Institute
  
  Trade Policy Analysis, 04/15/2011
  

  An examination of the past 30 years of U.S. economic performance offers no evidence that a rising level of imports or growing trade deficits have negatively affected the U.S. economy. In fact, since 1980, the U.S. economy has grown more than three times faster during periods when the trade deficit was expanding as a share of gross domestic product (GDP) compared to periods when it was contracting. Stock market appreciation, manufacturing output, and job growth were all significantly more robust during periods of expanding imports and trade deficits. The goal of U.S. trade policy should not be to promote exports at the expense of imports, but to maximize the freedom of Americans to trade goods, services, and assets in the global marketplace.

  
  
  
• Budget & Taxation
  

  Ryan Budget Plan Promotes Housing Recovery by Ending Fannie Mae and Freddie Mac

  By David John, The Heritage Foundation
  
  WebMemo, 04/15/2011
  

  While much of the press attention has focused on other parts of the budget plan put forth by Representative Paul Ryan (R–WI), a key provision is its call for an end to Fannie Mae and Freddie Mac, the two housing giants that essentially failed and were taken over by their regulator in 2008. In their place, Ryan proposes to allow private-market secondary lenders to fairly compete, with the knowledge that they will ultimately bear appropriate risk for the loans they guarantee. Just eliminating Fannie Mae and Freddie Mac is a huge step in the right direction. So far, the two have cost taxpayers about hundreds of billions of dollars. Sadly, these costs are unavoidable, but eliminating the two housing giants and their government guarantee would protect taxpayers from similar losses in the next housing downturn.

  
  
  
• Health Care
  

  Reforming Health Care on the Foundation of First Principles

  By Robert Moffit, The Heritage Foundation
  
  Lecture, 04/15/2011
  

  The national health care debate has turned into a broader debate about the size and scope of federal power, and our congressional leaders need to become agents of a new constitutional vitality, animated by a deep and dutiful devotion to the Constitution’s fundamental principles of liberty, limited government, and federalism. This means that, to guide our thinking as we grapple with the question of how to reform health care, we must repair to the Constitution. To make health insurance accessible and affordable for millions of Americans, Congress must do its job under the Constitution, not outside of it. In doing so, Congress can also take advantage of the federal system itself, the division of powers between the national government and the states, and allow states to experiment with big ideas.

  
  
  
• Economic Growth
  

  The United States vs. China—Which Economy Is Bigger, Which Is Better

  By Derek Scissors, The Heritage Foundation
  
  Backgrounder, 04/15/2011
  

  China’s leap from poverty due to the marvelously successful market reforms introduced in 1978 has obscured serious weaknesses in its economy—especially compared to the American economy. These weaknesses have been exacerbated by renewed Chinese state intervention that began around 2003. Many seem convinced that China is at the cusp of surpassing the U.S. economically. But Americans should not lose track of their huge advantages over the Chinese—in income, in natural resources, and in surprising areas such as labor. This Backgrounder explains why it is vital that the U.S. remember its strengths and recognize profound Chinese weaknesses.

  
  
  
• National Security
  

  Two Steps Backward: Homeland Security’s Presidential Policy Directive-8

  By Jena Baker McNeill, Matt Mayer, The Heritage Foundation
  
  WebMemo, 04/15/2011
  

  On April 8, the Obama Administration released Presidential Policy Directive-8 (PPD-8), which claims to update national preparedness policy. While the directive’s emphasis on capabilities-based planning is appropriate and should be applauded, its dismissal of key national preparedness guidance and plans is puzzling. Instead of recognizing what has and has not been accomplished since the last major preparedness directive was issued, the directive reads as though the past seven years never happened. Attempting to recreate the wheel in terms of preparedness policy is a waste of resources. The Obama Administration should instead seek to build upon prior work and act as a better integrator of nationwide efforts to prepare for catastrophic disasters.

  
  
  
• Budget & Taxation
  

  Tax Day 2011: Deficit Spending Hides Future Tax Hikes

  By Curtis Dubay, The Heritage Foundation
  
  WebMemo, 04/15/2011
  

  Despite this bleak outlook, higher tax rates and the slower-growing economy that would come with them are not inevitable. Congress and the President must cut spending, and they must do so soon—before interest expenses and entitlement spending take off. It is time for Congress and the President to stop the current trajectory of massive spending and borrowing and be honest with the American people about the hidden deficit taxes that they are asking them to pay in the future. As millions of American taxpayers are finding out on Tax Day, taxes are already too high. Rather than pass on these hidden deficit taxes, it is time for Washington to get to work and cut spending.

  
  
  
• Education
  

  From School Choice to Educational Choice

  By Frederick M. Hess, Olivia Meeks, Bruno V. Manno, American Enterprise Institute
  
  Education Outlook, 04/14/2011
  

  In recent decades, many calls for transformative change in American schooling have advocated school choice. Yet these calls themselves have too often accepted the orthodoxies of the nineteenth-century schoolhouse. In the new book Customized Schooling: Beyond Whole-School Reform (Harvard Education Press, 2011), AEI worked with the Walton Family Foundation’s Bruno V. Manno to offer a more promising vision for twenty-first-century, choice-centered reform. This Outlook highlights six key aspects of systemic reform.

  
  
  
• Economic Growth
  

  Uncertainty Mounts

  By John H. Makin, American Enterprise Institute
  
  Economic Outlook, 04/14/2011
  

  Hope that the global economy has shaken off the dust of the 2007-2008 financial crisis is giving way to uncertainty as the Arab Spring and disaster in Japan threaten to reverse recovery momentum. Market behavior is signaling a slowdown in US growth, but there are few options left for policymakers as fiscal and monetary stimulus fade. Budget pressures will make further stimulus unlikely, leading to mounting uncertainty about the way forward.

  
  
  
• National Security
  

  China at Sea

  By David M. Slayton, Craig Hooper, Hoover Institution
  
  Hoover Digest, 04/14/2011
  

  Thirty years of relatively harmonious amphibious operations with like-minded partners has led America to forget that amphibious-assault platforms can be just as useful in sowing disorder as they are in imposing stability. And with an ever-increasing number of nations poised to pursue core national interests overseas, the long-unquestioned right of intervention from the sea is set to grow into a far more complex, far more contentious geopolitical challenge. To curb China’s enthusiasm for its new amphibious capabilities, America needs to spend less time fretting about its high-tech military baubles and get back to the basics of building comprehensive regional security plans. And a critical first step is to recognize the potential impact of Beijing’s low-tech amphibious ambitions.

  
  
  
• Budget & Taxation
  

  Brown and Blue

  By Bill Whalen, Hoover Institution
  
  Hoover Digest, 04/14/2011
  

  The current state of California politics is austere and contrarian. The Golden State’s future, for the next four years at least, rests in the hands of Jerry Brown, a career politician with four decades of experience but little to offer in the way of hope and vision. Surviving the present ordeal, as Brown has asked, requires California’s left to give ground on its precious public safety net and the right to yield on its core aversion to higher taxation. Jerry Brown is not new. Neither is his approach. But the idea of a minus-one (spending cuts) plus another minus-one (higher taxes) leading to a political net plus? Call it the “new math” in the Golden State.

  
  
  
• Regulation & Deregulation
  

  In Harm’s Way

  By Henry I. Miller, Hoover Institution
  
  Hoover Digest, 04/14/2011
  

  While they indulge in a variety of high-risk behavior, many Americans worry about activities or products that pose only negligible risks. These include contact with minuscule amounts of chemicals that have been in widespread and safe use for decades. In the end, people frequently make unwise choices: eschewing drugs that prevent heart attacks or cancer but exposing their kids to the real dangers of childhood viral and bacterial diseases while “protecting” them from imaginary hobgoblins such as bisphenol A (BPA) and pesticide residues in foods. Allowable chemical pesticide residues in food are extremely low—and seldom exceeded—and 99.99 percent of pesticidal substances in food occur naturally. Scientists, educators, and government officials must work harder to disabuse the public of misconceptions about risk so they can make better-informed, smarter decisions about their health and well-being.

  
  
  
• National Security
  

  Armed with the Odds

  By Thomas H. Henriksen, Hoover Institution
  
  Hoover Digest, 04/14/2011
  

  The defense budget, even with its trims, is not a doomsday omen for America’s fighting forces. It avoids drastic military belt-tightening characteristic of postwar eras while making some calculated bets. In some respects, the Gates plan is a pre-emptive strike that tries to frame the defense-budget debate for fiscal year 2012. Faced with the need to trim federal spending, Gates sought to accommodate the prevailing mood of fiscal restraint and husband military strength. His short-term bets could be reversed next year if necessary. And, in the end, Congress and the White House must scrutinize other federal expenditures, including the swollen entitlement programs, to restore fiscal soundness. The Pentagon budget comes to slightly over 20 percent of all federal expenditures, so even an unrealistic 10 percent cut in military spending would fail to dent the immense federal budget outlays.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Climate Coup: Global Warming’s Invasion of Our Government and Our Lives

  By Patrick J. Michaels, Cato Institute
  
  Book, 04/14/2011
  

  Global warming alarmism is invading nearly every aspect of our society. Climate Coup provides an antidote to this, gathering together myth-breaking insights and data from a team of experts on the pervasive influence global warming alarmism is having on health, education, law, national defense, international development, trade, and academic publishing. Climate Coup confronts the exaggerations, opportunism, and myths about global warming that are all too pervasively altering the shape of our lives and provides the tools and insights necessary to push back against the takeover.

  
  
  
• Economic and Political Thought
  

  The Not So Dismal Science: Humanitarians v. Economists

  By William McGurn, Hillsdale College
  
  Imprimis, 04/14/2011
  

  In this piece, the author attacks the description of economics as “the dismal science.” He supports a different view—that when it comes to seeing the potential in even the most desperate citizens of this earth, the economists, business leaders, and champions of a commercial republic are often far ahead of the progressives, artists, and humanitarians. In truth, calling economics the “dismal science” is exactly backwards. The economists and businessmen are those who hold the hopeful view of life. Far from being fundamentally opposed, the admirers of Adam Smith have more in common with the followers of the Good Book than we might suppose.

  
  
  
• Economic and Political Thought
  

  The Market Society and Its Morality: 250 Years of Adam Smith’s Theory of Moral Sentiments

  By Manfred Petri, Council on Public Policy
  
  Essay, 04/14/2011
  

  The Theory of Moral Sentiments, published in 1759, was Adam Smith’s first major publication. It was his contribution to the contemporary public discourse to find out a set of scientific, non-religiously based fundamentals of man’s capability of moral behavior. In October 2009, the Council on Public Policy held a two day symposium focusing on “The Market Society and Its Morality: 250 Years of Adam Smith’s Theory of Moral Sentiments.” This collection of essays was taken from that symposium. There could not have been a better time than the peak of the financial crisis to go back to one of the intellectual pillars of economic liberalism and to reflect on the relation between morality and free markets in Adam Smith’s Theory of Moral Sentiments and his Wealth of Nations.

  
  
  
• Budget & Taxation
  

  The Economic Burden Caused by Tax Code Complexity

  By Arthur B. Laffer, Wayne H. Winegarden, John Childs, Laffer Center for Supply-Side Economics
  
  Studies, 04/14/2011
  

  This study creates a comprehensive estimate of the total administrative costs, time costs, and direct tax compliance costs created by the complex U.S. federal income tax code. This we estimate that U.S. taxpayers pay $431.1 billion annually, or 30% of total income taxes collected, just to comply with and administer the U.S. income tax system. In response to taxes, people also alter their combinations of work and leisure, savings and consumption, as well as how they allocate their investments in response to tax incentives. The estimated $431.1 billion in tax compliance costs does not include these behavioral changes that misallocate resources from their most economically-efficient uses toward their most tax-efficient uses. Nor do these costs account for the lost economic opportunities caused by the uncertainty and confusion of our complex tax code.

  
  
  
• Regulation & Deregulation
  

  Streamlining State Government: Reforming the Regulatory Structure of Pennsylvania

  By Commonwealth Foundation, Commonwealth Foundation for Public Policy Alternatives
  
  Report, 04/14/2011
  

  The Keystone State should look at streamlining efforts to trim the size of government and reduce the bureaucracy that inhibits economic growth. Three areas—telecommunications, prevailing wage laws, and natural gas drilling—represent but the tip of the iceberg of opportunities for Pennsylvania to begin streamlining its regulations. This report looks at comprehensive streamlining efforts in other states, and calls on Gov. Tom Corbett to convene a temporary commission of business leaders, regulators, and experts to create a plan for reducing the maze of regulatory agencies. Streamlining state government will better serve residents, bring state expenses into line with revenue, and encourage economic growth.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Hotheads on a Lukewarm Planet

  By Patrick J. Michaels, Capital Research Center
  
  Green Watch, 04/14/2011
  

  The public debate over global warming is driven by two camps: Hotheads, who claim that the earth is dangerously overheating thanks largely to mankind’s industrial activities, and those who claim that there’s no such thing as global warming or the greenhouse effect. Hotheads dominate the debate because they have considerable influence over what science is actually published in peer-reviewed journals. But both sides are wrong: the data show that the planet is really “lukewarming.”

  
  
  
• Economic Growth
  

  GE: When General Electric Becomes Government Electric

  By Fred Lucas, Capital Research Center
  
  Organization Trends, 04/14/2011
  

  General Electric (GE) is far too cozy with the Obama administration. Its affection for big government programs that allow it to receive huge taxpayer subsidies is nothing new, but its closeness to President Obama ought to worry Americans. GE is a corporation that finds the form and substance of President Obama’s governance more than acceptable. It is a big business that finds free enterprise antiquated. GE seeks to “reset” the economy to fit the Obama administration’s idea that government is always the solution. And that would anger GE’s old employee, Ronald Reagan.

  
  
  
• Budget & Taxation
  

  The Battle for New Jersey

  By Kevin Mooney, Capital Research Center
  
  Labor Watch, 04/14/2011
  

  Governor Chris Christie is rallying public support for his fight against public sector unions and activist courts, and he is succeeding in the unlikeliest of places—New Jersey, a state comprised of small municipalities many residents of which (and their parents, spouses, children, and siblings) have government jobs as clerks, cops and schoolteachers. But New Jersey is heading towards bankruptcy, and attitudes toward public-sector unions are changing. Families are deciding that they cannot afford New Jersey’s high (and getting higher) property taxes, and judges who keep ruling in favor of entrenched union interests.

  
  
  
• The Constitution/Civil Liberties
  

  Pew and the Gang Ride Again: Citizens’ Free Speech Still in Danger

  By Scott Walter, Capital Research Center
  
  Foundation Watch, 04/14/2011
  

  The Pew Charitable Trusts and a small group of left-of-center grantmakers have launched repeated crusades to control Americans’ speech, whether it’s expressed in political campaigns, newspapers, or television and radio. Their latest effort aims to bring speech over the Internet to heel. But even some left-wingers suspect the goal is not to help the average citizen but to defend elite gatekeepers’ control over the nation’s conversations.

  
  
  
• Education
  

  Here We Have Idaho: A State Report Card on Public Higher Education

  By Heather Lakemacher, Eric Markley, American Council of Trustees and Alumni
  
  Report, 04/14/2011
  

  This report examines Idaho’s undergraduate-degree-granting colleges and universities. It focuses on what students are learning (the curriculum), whether the marketplace of ideas is vibrant (intellectual diversity), how the universities are run (governance), and what a college education costs (affordability). In each case, it evaluates Idaho institutions in light of issues, studies, and national best practices, awarding a Passing or Failing grade.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Seattle Times’ Coffee and Climate Story Substitutes Anecdote for Science

  By Todd Myers, Washington Policy Center
  
  Environmental Watch, 04/14/2011
  

  A recent Seattle Times article claimed that yields in Costa Rica have dropped dramatically in the last decade, with farmers and scientists blaming climate change for a significant portion of the troubles. However, there are significant factual problems with the story. As Darwin warned a century and a half ago, we are susceptible to presuming we understand the cause of natural events even when our ignorance is profound. Science journalism can be espe¬cially susceptible to this common pitfall by substituting a simple compelling story for the com¬plex interplay of data-based science. Reporting the uncertainties of scientific information may not result in gripping journalism, but it is critical to enabling the public and policymakers to rely on the stories they read about climate change or the other environmental challenges we face. If we exaggerate the risks of climate change, we may enact policies that do more harm than good.

  
  
  
• Crime, Justice & the Law
  

  How Obama Embraces Islam’s Sharia Agenda

  By Andrew C. McCarthy, Encounter Books
  
  Book, 04/13/2011
  

  The global Islamist movement aims, in the words of the international Muslim Brotherhood, to destroy the West by sabotaging it from within. Its principal strategy is not mass murder but the exploitation of Western freedoms and the insinuation of sharia principles into Western legal systems. Because those principles are hostile to our core liberties – indeed, hostile even to the bedrock premise that people are free to govern themselves as they see fit – sharia’s advance gradually undermines our culture. In this Broadside, Andrew C. McCarthy shows how the sharia agenda has found a friend in the Obama administration. President Obama is actively abetting the Islamist platform: promoting sharia in his foreign policy, easing enforcement of laws that stop Islamic “charities” from diverting funds to jihadist terror, and even sponsoring a United Nations resolution that – under the guise of insulating Islam from criticism – would stifle First Amendment rights.

  
  
  
• Budget & Taxation
  

  Government Unions and the Bankrupting of America

  By Daniel Disalvo, Encounter Books
  
  Book, 04/13/2011
  

  Government-workers unions have been political juggernauts in the U.S. since the unseen collective-bargaining-rights revolution of the 1960s and ‘70s. These unions are different and more powerful than those that battle owners and managers in the private sector. To advance their interests, unions in the public sector have created cartels with their political allies, mostly in the Democratic Party, to the exclusion of the taxpaying public. In this Broadside, Daniel DiSalvo shows how this government takeover happened and tells us what can be done to protect the public interest. The fiscal consequences have already proven dire and threaten the long-term power and prestige of the United States on the world stage.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  How the EPA’s Green Tyranny is Stifling America

  By Rich Tzrupek, Encounter Books
  
  Book, 04/13/2011
  

  The relationship between environmental regulation and economic growth has gone from dysfunctional to disastrous under the leadership of Barack Obama’s EPA Administrator Lisa Jackson. Jackson’s EPA has assumed broad new powers and promulgated sweeping new regulations unlike anything America has seen since the Clean Air Act and Clean Water Act were signed into law 40 years ago. While much of the public has focused on the EPA’s plans to regulate greenhouse-gas emissions, the agency’s power grab extends into far more areas of society and the economy than fossil-fuel use alone. In this Broadside, Rich Trzupek explains why Obama’s EPA is different and more dangerous than any other since the agency was created. While the tentacles of this EPA are silently creeping into our lives, Lisa Jackson smilingly assures us that everything the EPA does generates revenue – instead of costing industry billions of dollars and America hundreds of thousands of jobs.

  
  
  
• Foreign Policy/International Affairs
  

  The Wages of Appeasement

  By Bruce Thornton, Encounter Books
  
  Book, 04/13/2011
  

  This book explores the reasons why a powerful state gives in to aggressors. It tells the story of three historical examples of appeasement: the Greek city-states of the fourth century B.C., which lost their freedom to Philip II of Macedon; England’s failure to stop Germany’s aggression in the 1920s and 1930s, which resulted in World War II; and the tentative American response to the ongoing Islamic jihad, along with thirty years of timidity in the face of Iran’s attacks on the United States. The inherent weaknesses of democracies and their bad habit of pursuing short-term interests at the expense of long-term security play a role in fostering appeasement. But more important are the faulty ideas that people indulge, from idealized views of human nature to utopian notions like pacifism or disarmament. Ultimately, The Wages of Appeasement combines narrative history and cultural analysis to illustrate how ideas can have deadly consequences.

  
  
  
• Economic Growth
  

  Why America Must Not Follow Europe

  By Daniel Hannan, Encounter Books
  
  Book, 04/13/2011
  

  In the past 40 years, Europeans have fallen further behind Americans in their standard of living and have become accustomed to high levels of structural unemployment. But despite the obvious negative impact of a European superstate, Americans seem more likely than ever to duplicate the errors of their cousins across the Atlantic. With increased bailouts, stimulus plans, and private-sector remuneration, the U.S. government is growing—while its economy is shrinking. In this Broadside, Daniel Hannan, a British Conservative Member of the European Parliament, calls on Americans to avoid Europe’s fate. He traces the common roots of British and American liberty and describes how both countries are losing their inheritance as government crowds out the private sphere. He calls for a renewed commitment to the Anglosphere: the alliance of free, English-speaking nations that has preserved freedom in our time. And he shows us the future that Americans could face.

  
  
  
• Health Care
  

  Establishing a Health Benefit Exchange

  By Roger Stark, Washington Policy Center
  
  Legislative Memo, 04/13/2011
  

  The massive new federal health care reform law, the Patient Protection and Affordable Care Act (PPACA), mandates that states create health insurance exchanges, or that states join together to create regional exchanges. Two bills introduced in Olympia, SB 5445 and HB 1740, would establish a health insurance exchange in Washington state. Both bills, with amendments, are now working their way through the legislative process. As amended, both bills require the governor to appoint a nine-member board to establish and manage the exchange. Because PPACA may not be constitutional, because it may be repealed by Congress, and because the board would be unelected, these two bills should be rejected.

  
  
  
• Budget & Taxation
  

  Proposed State Takeover of Public Education Employee Health Plans May Add Significant New Costs

  By Paul Guppy, Washington Policy Center
  
  Legislative Memo, 04/13/2011
  

  One idea some lawmakers in Olympia are considering in an effort to close Washington State’s looming budget gap is to implement a state takeover of local school health benefits plans and require over 100,000 public education employees to drop their private health coverage and join a plan directed by the Health Care Authority. Mandating that public education employees join a state-sponsored plan would force 98 percent of workers to accept an option they have already rejected. In short, the proposed mandatory expansion of state health coverage moves public policy in the wrong direction. It would shift control over health benefits spending away from local districts to Olympia and would further restrict the private insurance market. Finally, it would represent a major expansion of state responsibilities in a time of tight budgets and possibly result in significant new costs for state taxpayers.

  
  
  
• Health Care
  

  State Lawmakers Propose Using a Phony Bed Tax and Provider Tax to Secure More Federal Money

  By Roger Stark, Washington Policy Center
  
  Legislative Memo, 04/13/2011
  

  Massive government intervention, like that enacted under President Obama’s national health care reform plan, will open opportunities for state legislators, including those in Washington state, to shift their Medicaid costs onto federal taxpayers. In Washington State, a nursing home bed tax bill has been proposed in order to help absorb these costs. However, instead of imposing futile regulations, federal and state government officials should repeal the Medicaid Safety Net Act and freeze Medicaid funding at 2007 levels. Additionally, these officials should increase oversight and transparency of Intergovernmental Transfers and provider taxes and tighten eligibility requirements to help control rising costs. Finally, the imposition of new provider taxes such as a nursing home bed tax or an additional tax on providers who serve the disabled should be avoided.

  
  
  
• Foreign Policy/International Affairs
  

  The “Arab Spring”: Heritage Foundation Recommendations

  By The Heritage Foundation, The Heritage Foundation
  
  WebMemo, 04/13/2011
  

  The “Arab Spring” has targeted several regimes in the Middle East: Egypt’s Hosni Mubarak has stepped down, leaving the future of the country uncertain; Syria’s Bashar al-Assad and Yemen’s Ali Abdullah Saleh cling to power; Libya’s Muammar Qadhafi has vowed to fight to the death despite the United States and NATO lining up against him. The U.S. needs more clear and prudent policies crafted to deal with the turmoil in particular countries. The Administration should also develop a real strategy designed to protect U.S. interests as world historical change sweeps the Middle East. Right now, White House leadership has been deficient on both counts. This Webmemo contains recommendations from The Heritage Foundation on various facets of the situation in the Middle East.

  
  
  
• The Constitution/Civil Liberties
  

  Overcriminalization and the Constitution

  By Brian Walsh, Benjamin Keane, The Heritage Foundation
  
  Legal Memorandum, 04/13/2011
  

  Although the Constitution’s great structural principles of federalism and separation of powers are designed to guard against the abuse of governmental power and secure individual liberty, Congress routinely flouts these constitutional safeguards by enacting vague, overly broad, and other improper and unconstitutional criminal laws. Thomas Jefferson warned that “concentrating” or combining the powers of the legislative, executive, and judicial branches of government “in the same hands is precisely the definition of despotic government.” Yet overcriminalization invites and effectively requires prosecutors, judges, and even unelected federal bureaucrats to engage in lawmaking to determine the scope and severity of criminal punishment. In order to preserve the rights of innocent Americans, the unbridled and unprincipled growth of federal criminal statutes and regulations must be contained.

  
  
  
• The Constitution/Civil Liberties
  

  From Culture Wars to Conscience Wars: Emerging Threats to Conscience

  By Thomas Messner, The Heritage Foundation
  
  Backgrounder, 04/13/2011
  

  Today, religious liberty issues are more complicated than simply freedom from government interference in religious worship or teaching. Threats to religious liberty and respect for conscience are emerging in the health care field, in the area of institutional religious freedom, and in the context of issues involving same-sex marriage and nondiscrimination policies. Religious liberty and respect for conscience should be encouraged and protected, both in civil society and in law and policy, as an effective and principled way to promote social peace and civic fraternity in an increasingly pluralistic society.

  
  
  
• The Constitution/Civil Liberties
  

  The Language of Law and the Foundations of American Constitutionalism

  By Gary McDowell, Edwin Meese III, The Heritage Foundation
  
  Lecture, 04/13/2011
  

  The Founders held that their written and ratified Constitution of limited enumerated powers was understood to be the embodiment of what Hamilton called the ‘intention of the people.” The recovery of that original foundation of the Constitution begins with the premises of those who stood at the beginning of modernity, especially Locke and Thomas Hobbes, for it is in their political philosophies of natural rights that one sees most clearly the moral grounds of originalism as the standard of interpretation. Originalism is rooted in the belief that men are all created equal and may not be legitimately ruled arbitrarily by another and that, to avoid such tyranny, all legitimate government must rest upon the consent of the sovereign people from whom all power flows.

  
  
  
• Budget & Taxation
  

  Payments in Lieu of Taxes as a Supplemental Revenue Source After the Earnings Tax Elimination

  By David Stokes, Show-Me Institute
  
  Essay, 04/11/2011
  

  Proposition A, passed by Missouri voters last November, requires that Kansas City and Saint Louis allow citizens the opportunity to vote on the continuation of their local earnings taxes within six months of the measure’s passage. Those local votes are scheduled to occur on April 5. If Saint Louis and Kansas City voters choose to vote out the earnings tax, they need to consider which combination of offsetting tax increases, tax base expansions, and budget cuts will best serve the people and businesses of their communities. A number of changes would likely be required to replace earnings tax revenues. One possible replacement for a portion of this revenue is payments in lieu of taxes (PILOTs) from nonprofit agencies that do not currently pay property taxes.

  
  
  
• Budget & Taxation
  

  New Evidence of the Effects of City Earnings Taxes on Growth

  By Howard J. Wall, Show-Me Institute
  
  Essay, 04/11/2011
  

  The economic theory argument against earnings taxes is that they place a city at a relative disadvantage when people decide where to work and/or live. In particular, when earnings taxes are imposed by cities such as Saint Louis and Kansas City, a person can avoid the tax relatively easily by working and living outside the city limits while still remaining within the metropolitan area. If city governments instead were to raise the same level of revenue from taxes on other, less-mobile, factors, that should lead to a smaller tax-avoidance response and a smaller distortion within the metropolitan area. Two empirical studies have addressed this theory and have arrived at opposing policy prescriptions. This essay offers a new perspective on the possible empirical implications of city earnings taxes in Saint Louis and Kansas City.

  
  
  
• Economic Growth
  

  Peru’s Next President Should Continue Political and Free Market Reforms

  By James Roberts, Edwar Enrique Escalante, The Heritage Foundation
  
  Backgrounder, 04/11/2011
  

  The United States and Peru have a strong and positive relationship that is helping to strengthen Peru’s democratic institutions and speed its integration into the globalized economy. This April, Peruvian voters will choose a new president, who will hopefully continue efforts to curb corruption, strengthen property rights, and effectively combat narco-terrorism. Alternatively, if a leftist government is elected, it could slow reform or even return Peru to populist statism, stunting Peru’s economic growth and development. In the run-up to the election, the Obama Administration should reaffirm by statements and actions that the United States wants Peru to stay the course on free market reforms, decentralize government power, and reject any attempt to return the country to failed statist policies.

  
  
  
• Foreign Policy/International Affairs
  

  China’s Crackdown and America’s Response: Supporting Liberty in Distant Places

  By Dean Cheng, The Heritage Foundation
  
  WebMemo, 04/11/2011
  

  As the “Jasmine Revolution” continues to unravel traditional power structures in the Middle East, Chinese authorities have been cracking down on dissidents and activists on a scale not seen in over a decade. On the eve of the next round of Strategic and Economic Dialogue talks, and with much less experienced Asia team members for the U.S.—many of whom have no China experience—there will be great pressure to overlook these harsh measures. But doing so would not help the dissidents but instead betray American ideals. The U.S. should retain the Tiananmen Square sanctions, link ideals and individuals, and support the study of legal warfare as a weapon of future conflict. Ultimately, the exceedingly dim prospects for democratic reform in China do not mean that the United States should abandon its support for it.