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Recent Policy Studies
Monetary Policy/Financial RegulationBy Anthony Randazzo, Reason FoundationReason, 07/27/2012
Quantitative easing (QE) is a fancy way of pushing to create money out of thin air to put in a digital bank account and then spend on mortgage-backed securities or government debt in order to lower long-term interest rates. The Fed fixing interest rates is sold as more of a market driven process for setting rates at a non-market established rate. This article illustrates how monetary policy is creating a future asset bubble crisis and how it is contributing to global economic weakness.
Budget & TaxationBy Charles Blahous, e21: Economic Policies for the 21st CenturyCommentary, 07/27/2012
The Congressional Budget Office (CBO) has just published its updated score of the 2010 health care law. The new score is bad news from almost any vantage point. CBO’s fiscal evaluation of the law is worse than before, even though the number of people receiving health insurance coverage is now projected to be fewer. And we should still expect the legislation to add over $340 billion to deficits during the next ten years, and more beyond, relative to actual prior law. All in all, CBO’s latest is another sobering report on the fiscal consequences of the health care law.
EducationBy Veronique de Rugy, Reason FoundationReason, 07/27/2012
The interest rate for the main federal student loan program was set to double on July 1, from 3.4 percent to 6.8 percent. Even in this contentious election year, there was one thing everyone in Washington could agree on: The rate hike should be avoided at all costs. The only disagreement was where to extract the $6 billion annually that would be needed to make up the difference. But extending the lower rate, which was instituted by the College Cost Reduction and Access Act of 2007, is foolhardy. By keeping student loan rates artificially low, the federal government is contributing to the rapid increase in college tuition and forcing today’s workers to subsidize the educational choices of tomorrow’s big earners.
LaborBy Tim Kane, Hudson InstituteTestimony, 07/27/2012
Currently, the National Labor Relations Act allows collective bargaining agreements (CBAs) that suppress individual bargaining rights. Specifically, CBAs can set wage floors and wage ceilings, barring merit-pay, even barring across the board raises by the employer to all workers. A better approach would not put collective rights at odds with individual rights, but to allow both to be realized. The RAISE Act will restore the upside of individual worker rights and allow firms to give individual bonuses and raises. Lifting the pay cap on union workers across America would provide a much needed boost to our economy and will generate an average raise of 10 percent to union workers in response to new productivity gains based on new incentives. The follow-on effects will lead to increased firm revenues and the creation of an additional 200,000 union jobs in the United States.
Natural Resources, Energy, Environment, & ScienceBy Ronald Bailey, Reason FoundationReason, 07/27/2012
The energy rebound effect where increased energy efficiency is offset by increases in energy use because increased fuel efficiency lowers the relative cost of consumption. The magnitude of energy rebound effects has important implications for strategies aimed at restraining climate change through energy conservation requirements. For example, a variety of studies suggest that improvements in energy efficiency could reduce energy consumption enough to cut global carbon dioxide emissions by 2050 by as much as 25 percent. Energy efficiency mandates advocated by environmental activists with the aim of mitigating future man-made global warming will likely fall far short of their goals. The point of improved energy efficiency is not to forgo its use but to boost its productivity as a way to provide people with more of the goods and services they want.
Natural Resources, Energy, Environment, & ScienceBy Henry I. Miller, Hoover InstitutionDefining Ideas, 07/27/2012
The benefits of genetically engineered crops are proven. When the naysayers remonstrate that genetically engineered foods have not been proven safe for human consumption, they are ignoring that to ensure their safety, all genetically engineered crops are extensively tested for toxins, allergens, and nutritional value before being marketed. Having raised unsubstantiated fears about the adequacy of the testing of genetically engineered foods, opponents of this technology then stray far into the weeds and urge that, because foods containing genetically engineered ingredients need not be labeled as such, consumers should avoid genetic engineering by going organic. That’s bad advice for all sorts of reasons.
Foreign Policy/International AffairsBy Kenneth Anderson, Hoover InstitutionDefining Ideas, 07/27/2012
What exactly is the United Nations and, for that matter, why is there still a United Nations at all? How has it managed to survive over time—given its long record of underperformance, frequent outright failure, and even more frequent irrelevance? On the United Nations’ core issues—collective peace and security, development, and universal human values and rights—its record is mediocre. Why, then, has not the ruthless evolutionary logic of history pruned it as a failed institutional sapling in a relentlessly competitive forest, as the League was pruned? We need ways of explaining the United Nations so as to explain and predict how it will evolve and whether and when that evolution will support US ideals and interests or conflict with them.
Elections, Transparency, & AccountabilityBy Ilya Shapiro, Cato InstituteTestimony, 07/27/2012
Citizens United did not rule on either individual or corporate contributions to candidates. All Citizens United did was remove the limits on independent associational expenditures. To the extent that “money in politics” is a problem, the solution isn’t to try to reduce the money, but to reduce the scope of political activity the money tries to influence. Shrink the size of government and its intrusions in people’s lives and you’ll shrink the amount people will spend trying to get their piece of the pie. The solution is rather obvious: Liberalize rather than further restrict the campaign finance regime. Get rid of limits on contributions to candidates and then have disclosures for those who donate some amount big enough for the interest in preventing the appearance of quid pro quo corruption to outweigh the potential for harassment.
Regulation & DeregulationBy Baylen Linnekin, Reason FoundationReason, 07/27/2012
On Tuesday the New York City Department of Mental Health and Hygiene will hold a public hearing on Mayor Bloomberg’s proposal to ban the sale in the city of sweetened beverages greater than 16 ounces. The ban would impact drinks containing sugar or any other “caloric sweetener,” which could include everything from a 20 ounce bottle of soda sold by a food truck or cart to a soda sweetened with high fructose corn syrup sold by a fast food restaurant to an iced tea sweetened with honey sold by a baseball-park vendor. The ban should be opposed for two main reasons. First, the ban would restrict food freedom of choice. Second, the ban is a bad idea because it rests on bad assumptions.
Budget & TaxationBy Nick Gillespie, Veronique de Rugy, Reason FoundationReason, 07/27/2012
Social Security and Medicare, which provide retirement and health insurance benefits for senior Americans, generally without regard to need, are funded by taxes on the relatively meager wages of younger Americans who will never enjoy anything close to the same benefits. From any serious fiscal or moral viewpoint, and particularly for the sake of helping those truly in need, Social Security and Medicare should be ended. The demographic math is irrefutable: Entitlements are killing the safety net. They should be replaced with social welfare programs that cover all citizens, regardless of age, but only those who are too poor or incapacitated to take care of themselves. Focusing on those truly in need instead of automatically shoveling out larger and larger amounts to well-off senior citizens is the best way to avert looming fiscal catastrophe and restore some morality to an indefensible system.
ImmigrationBy Alabama Policy Institute, Alabama Policy InstituteGuide to the Issues, 07/27/2012
The Supreme Court held that three out of four challenged provisions of the Arizona immigration law were unconstitutional. In addition to following the general spirit of the Arizona law, some components of the Alabama immigration law mirror language included in Arizona’s law. The full ramifications of the Supreme Court’s ruling on Arizona’s immigration law are still being felt. How that will affect Alabama’s similar immigration reform measures depends largely on the 11th Circuit’s application of the Court’s decision. Alabama’s immigration law also faces constitutional challenges with respect to civil rights provisions that have yet to be addressed by the Supreme Court. As Alabama reviews its immigration law in the years to come, political leaders will undoubtedly look to the Court’s opinion to ensure that the rule of law is upheld in a manner consistent with the Constitution.
Natural Resources, Energy, Environment, & ScienceBy Donovan D. Schafer, Independence InstituteIssue Paper, 07/27/2012
The debate over hydraulic fracturing (“fracking”) has suffered from misinformation. The superficial arguments that attack fracking as a direct cause of contamination have been largely discredited. Consequently, anti-fracking groups have begun resorting to broad arguments against development in general. A ban on fracking would not satisfy those who present general arguments against any kind of development. Acceptance of these arguments would require an outright ban on all oil and gas activities, new wind farm construction, electric transmission construction, residential housing developments, and the like.
Transportation/InfrastructureBy Samuel R. Staley, Reason FoundationPolicy Study, 07/27/2012
Chicago’s transportation network suffers from a failure to provide north-south routes to supply regional access that bypasses the downtown, a failure to address rising congestion and development in the northern region, and a failure to invest in essential road capacity. These deficiencies can be addressed by adding incremental capacity to the existing network by putting the right roadway capacity in the right places at the right times. Chicago needs an aggressive approach to re-examining the road network, which should include four critical dimensions: the addition of new capacity in key areas of the network; better management of the existing network, through Intelligent Transportation Systems (ITS) technologies, including adaptive traffic control and improved signal coordination, ramp metering and congestion pricing; the addition of new roadways to create critical north-south routes that more efficiently address contemporary travel needs outside the city of Chicago, thereby filling in the “missing links”; and integrating transit into regional roadway network planning and programming.
ImmigrationBy Jon Feere, Center for Immigration StudiesBackgrounder, 07/27/2012
Many states have enacted enforcement-focused immigration laws in an effort to discourage illegal immigration into their jurisdictions. E-Verify, the federally run employment authorization program, has become a central part of this state-level effort. South Carolina is the only state with an active audit process, and the effort appears to make the state’s E-Verify law more effective than it otherwise would be. Many businesses likely conclude that becoming the target of a federal investigation of E-Verify compliance is unlikely. A random, state-level auditing process is much more likely to encourage compliance with a state E-Verify mandate. An audit process necessarily requires a state to obtain a list of employers using E-Verify. Such lists are only available from the federal government. It is clear that better cooperation from federal agencies would make state E-Verify efforts much more effective.
EducationBy Liv Finne, Washington Policy CenterPolicy Brief, 07/26/2012
High-quality studies find that well-run charter schools consistently deliver a better public education to students than do typical traditional public schools. The studies on charter schools show indicate that they do not “cream off” the best students, as critics claim, nor do they negatively affect the achievement of students in traditional public schools. Most studies find that in the states where charter schools exist, they bring six primary benefits to public education. They tend to improve student learning, serve low-income communities, help close the achievement gap, be popular with parents, provide parents with education choice and encourage officials to raise the quality of traditional public schools.
Natural Resources, Energy, Environment, & ScienceBy Steve Everly, Washington Legal FoundationLegal Backgrounder, 07/26/2012
Opponents have latched on to a harsh-sounding name – “fracking,” a percussive, abbreviated form of “hydraulic fracturing” – and used it to fuel public opposition to the exploration of American energy resources. A closer look at the record, though, suggests that impacts from “fracking” are rarely based on scientific findings or even on basic facts. Yet opponents have effectively driven their own un-reality into public discourse, saturating the media with so many falsehoods that reporters mischaracterize the process now as a matter of AP-style. Incentivized by the prospect of a catchy headline, reporters scribe “fracking” to elements of oil and gas development far removed from the actual process.
Elections, Transparency, & AccountabilityBy Mark Flatten, Goldwater InstituteReport, 07/25/2012
Three law firms dominate the legal work that goes into issuing state and local government debt in Arizona. Near the end of the documents that describe government bond offerings to investors is a section called “relationships among the parties.” This is where potential conflicts of interest among the law firms and bond houses involved in the deal are disclosed. The Goldwater Institute analyzed the official statements in 75 recent bond sales with a total value of almost $6.8 billion to determine who profits from putting the deals together. All but one of those issues involved at least one of the three law firms. There is nothing illegal or unethical about the close relationships among the law firms, the bond houses they work for and the governments that issue the debt, as long as those relationships are disclosed and conflict-of-interest waivers are obtained.
Budget & TaxationBy Will Freeland, Scott A. Hodge, Tax FoundationReport, 07/25/2012
Recent IRS data reveals that in 2010, over 58 million federal income tax filers had no income tax liability after taking deductions and credits. This amounts to nearly 41 percent of the roughly 143 million tax returns filed that year. Indeed, many of these filers actually had a negative income tax burden because they were eligible for “refundable” tax credits even though they had no income tax liability. These taxpayers did this through the wholly legal and legitimate use of deductions and credits provided in the income tax code. These 58 million nonpayers represent the second highest percentage of nonpayers since 1940, behind only 2009, where nearly 42 percent of income tax filers were nonpayers. By contrast, the low point in the modern era for nonpayers was 1969, when only 16 percent of filers had no income tax liability. As recently as 2000, 25.2 percent of filers paid no income taxes.
Foreign Policy/International AffairsBy Sasha Gordon, American Enterprise InstituteAEI Critical Threats Project, 07/25/2012
Yemeni military victories in Abyan and Shabwah are an encouraging development in the fight against al Qaeda in the Arabian Peninsula (AQAP) and its insurgent wing, Ansar al Sharia. It is tempting to rely on local tribal militias to hold the ground, but the situation is precarious enough to warrant more vigilance. The U.S. does not in all likelihood have sufficient expertise to orchestrate the necessary tribal support in the long run. Ansar al Sharia was driven from the cities, but the militants have not fled farther than the surrounding mountains by many reports. The U.S. must examine the likely requirements for external support to the tribes, by, with and through the Yemeni military and state if possible, but by other means if necessary. Understanding of the tribes to the furthest possible extent is the first step.
Budget & TaxationBy Tad DeHaven, Cato InstitutePolicy Analysis, 07/25/2012
Rising federal spending and huge deficits are pushing the nation toward a financial and economic crisis. One good way to save money would be to cut subsidies to businesses. Corporate welfare often subsidizes failing and mismanaged businesses and induces firms to spend more time on lobbying rather than on making better products. Instead of correcting market failures, federal subsidies misallocate resources and introduce government failures into the marketplace. Corporate welfare also creates strong ties between politicians and business leaders. Corporate welfare doesn’t aid economic growth and it is an affront to America’s constitutional principles of limited government and equality under the law.
Transportation/InfrastructureBy Randal O’Toole, National Center for Policy AnalysisBrief Analysis, 07/25/2012
Subsidies have not resulted in better transportation or increased mobility, especially when it comes to America’s transit systems. Indeed, despite more than $500 billion in subsidies to public transit since 1970, the average urban resident rode transit fewer times in 2011 than in 1970. One reason why subsidies are ineffective at improving transportation is that most of those subsidies are captured by non-users, including increased profits for construction firms and increased pay and benefits for transportation workers.
Health CareBy Nigel S.B. Rawson, Fraser InstituteFraser Alert, 07/25/2012
Considerably fewer oncology drugs were approved in Canada in the last decade than in the United States. Further, slower review times in Canada led to delays in access to those that were approved. For over 40% of the drugs, Canadian marketing approval was more than 18 months after that in the United States. This finding raises questions as to why review times are longer in Canada than in the US or Europe and whether the drug evaluation system in Canada is beneficial or detrimental to Canadians with cancer.
Monetary Policy/Financial RegulationBy David Howden, Mercatus CenterWorking Paper, 07/25/2012
The economic collapses of Iceland and Ireland after 2008 are the most severe in the developed world in recent history. This paper assesses five key differences in the causes of and responses to each country’s crisis. On the causal side, the paper analyses the role that deposit insurance served in artificially increasing risk-adjusted returns and the subsequent increase in loanable funds that bred large and unsustainable financial sectors. On the response side the paper analyses the speed, transparency, and effectiveness of the nationalization of each country’s financial sector; the decision whether to bail out key financial institutions or to allow them to fail; and the differences in exchange-rate structures that created different recovery paths. The paper draws policy conclusions for countries with large, unstable banking sectors, notably the United States.
Budget & TaxationBy Veronique De Rugy, Mercatus CenterTestimony, 07/25/2012
This testimony before the House Committee on Oversight and Government Reform, Subcommittee on Regulatory Affairs indicates that every loan guarantee program transfers the risk from lenders to taxpayers, is likely to inhibit innovation, and increases the overall cost of borrowing. At a minimum, such guarantees distort crucial market signals that determine where capital should be invested, resulting in lower interest rates that are unmerited and a reduction of capital for more worthy projects. At their worst, these guarantees introduce political incentives into business decisions, creating the conditions for businesses to seek financial rewards by pleasing political interests rather than customers. This is called cronyism, and it entails real economic costs.
Information TechnologyBy John Rosenthal, Milken InstituteThe Milken Institute Review, 07/25/2012
From the telegraph to the cell phone to the fax machine, every new advance in communications technology has been heralded as the beginning of the end for the U.S. Postal Service. And yet this constitutionally mandated government service, which still clings to 18th-century institutions like handsomely printed paper stamps, has managed to stay relevant into the 21st century. Indeed, it has persisted in spite of the extra burden imposed on it as a quasigovernment agency operating in a market full of efficient, largely unregulated private carriers. The latest mortal threat to the Postal Service has come from the Internet. The decline of the direct mail calls for the Postal Service’s decline to find a manageable solution that would continue to provide direct access to homes.
Economic GrowthBy James Plummer, Pelican Institute for Public PolicyPolicy Study, 07/25/2012
As the Great Recession drags on, unemployment remains a major concern throughout the state of Louisiana and the nation as a whole. While the jobs situation in Louisiana is somewhat better than the national average, the unemployment rate for working-age teens (16-19) is astronomical and bodes ill for the future of Louisiana’s youth. Figures provided by the U.S. Census Bureau1 reveal shocking changes for the worse in regards to teenage employment in Louisiana. A new analysis finds that recent increases in the federal minimum wage have accelerated this trend. According to this analysis, increases in the minimum wage from $5.15 to $7.25 have cost Louisiana teenagers over 6,600 jobs. It is not surprising that a 41 percent increase in the cost of unskilled labor would result in an excess supply of that labor. Policymakers should keep these basic economic facts in mind when contemplating minimum wage increases.
Monetary Policy/Financial RegulationBy Nicole Gelinas, Manhattan InstituteCity Journal, 07/25/2012
The Dodd-Frank Wall Street Reform and Consumer Protection Act established the new watchdog called the Bureau of Consumer Financial Protection, which is commonly shortened to the CFPB. Despite the good press it has received, the CFPB—which will cost taxpayers almost half a billion dollars per year—is useless in some ways and deeply harmful in others. The agency is equally incapable of remedying the worst ailment facing the American financial “consumer”: crushing debt, much of it purveyed by the federal government. Congress has given the CFPB the formidable power of banning abusive, unfair, deceptive, or discriminatory financial practices relating to Americans’ everyday financial interactions. Though that may sound appealing, remember how the government, by trying to do essentially the same thing with mortgages, lured poorer people into financial contracts that they couldn’t afford. The CFPB may do for credit cards and other financial products what the government did for mortgages: make the poor think that borrowing lots of money is perfectly reasonable. The CFPB, in sum, is Washington’s new weapon in its war for more debt.
Natural Resources, Energy, Environment, & ScienceBy Diana Furchtgott-Roth, Manhattan InstituteIssues, 07/25/2012
The Obama administration has made providing taxpayer dollars for so-called “green jobs” a top policy priority. In his 2011 State of the Union address, the president maintained that government subsidies for “clean energy technology…will strengthen our security, protect our planet, and create countless new jobs for our people.” The financial failure of a number of specific firms which received Department of Energy loan guarantees, however, has raised the question of whether the policy itself is effective or sustainable.
Natural Resources, Energy, Environment, & ScienceBy Nicolas Loris, The Heritage FoundationBackgrounder, 07/25/2012
For decades, coal has literally been the rock that has powered America with cheap, reliable energy. Yet the federal government is using every possible avenue to reduce coal’s role in American energy production by creating an environment in which coal production’s decline is inevitable. Congress should reform federal policies and regulations to enable the market—not federal politicians and bureaucrats—to determine the role of coal in U.S. electricity generation. This includes repealing, preventing, or freezing unnecessary regulations and empowering the states to appropriately balance economic growth and environmental protection.
Health CareBy Daniel Callahan, Peter Lawler, The Heritage FoundationDiscussion Paper, 07/25/2012
America is undergoing a demographic revolution, with a rapidly aging population blessed with greater longevity. While this is a triumph of modern medicine, it also presents an unprecedented ethical and fiscal challenge for individuals, families, medical professionals, and policymakers. In particular, Americans need to think carefully about care at the end of life. How should we think about life and death itself, the role of family and religion, and the duties of medical professionals and the use of advanced technology in the provision of end-of-life care? What is the role of freedom and personal responsibility? The Center for Policy Innovation asked two leading scholars of ethics and health policy to engage in an exchange on these issues.
Budget & TaxationBy Salim Furth, The Heritage FoundationBackgrounder, 07/25/2012
A government that systematically finances spending through unsustainable levels of borrowing eventually finds itself in a crisis. The crisis is often triggered when economic growth slows or interest rates rise, leading to a vicious cycle of larger and larger interest payments. Often, such crises result in default on government debt. The alternative is painful austerity—higher taxes combined with lower spending. The only sure way to avoid both default and austerity is to keep debt low relative to output.
Monetary Policy/Financial Regulation
Financial Markets and “System Effects”: Complexity, Recursiveness, Uncertainty and Mistakes in FinanceBy Alex J. Pullock, American Enterprise InstituteFinancial Services Outlook, 07/24/2012
With all of the knowledge and experience collected in financial markets and governments, why are we not able to avoid repeated disastrous mistakes like those that led to the US housing meltdown and the European sovereign debt crisis? It is because financial markets are governed by a recursive system of interconnected decisions, theories, strategies, predictions, actions, and expectations that lead to booms and busts. History shows that the complexity of these interactions makes it nearly impossible to predict accurately which way the markets will go. Regulators like the Federal Reserve are themselves too enmeshed in the system to avoid its systemic risk. We must recognize the reality of uncertainty and the absence of any godlike regulatory guardians.
Natural Resources, Energy, Environment, & ScienceBy William Yeatman, Competitive Enterprise InstituteStudies, 07/24/2012
One of the Environmental Protection Agency’s (EPA) more dubious regulatory efforts remains below the radar to many: the Regional Haze rule. The EPA’s Regional Haze program seeks to remedy visibility impairment at federal National Parks and Wilderness Areas. Because Regional Haze is an aesthetic regulation, and not a public health standard, Congress emphasized that states should be the lead decision makers. However, the EPA has devised a loophole to usurp state authority and federally impose a strict new set of emissions controls that cost 10 to 20 times more than the technology the states would otherwise have used. Its real goal is to impose another costly regulation on electric utilities and force them to shut down their coal-fired generating units. Ultimately, all states could be subject to the EPA’s Regional Haze power grab.
Natural Resources, Energy, Environment, & ScienceBy Christopher Monckton, Heartland InstituteArticle, 07/24/2012
Until climate scientists learn to leave hard-left politics at home and start to discuss the scientific arguments of skeptics scientifically, they will remain unheeded. Perhaps the most interesting question that historians will address, when looking back on the “global warming” scare, is how it came about that a tiny handful of determined skeptics, with little or no funding and no official backing, defeated the lavishly-funded Governments, scientific academies, news media, environmental groups, universities, schoolteachers, corporations and “global-warming” profiteers such as Al Gore. One answer to that interesting question is surely this. The climate-extremists have the money, the power and the glory, but the skeptics have the truth.
Budget & TaxationBy John Nothdurft, Heartland InstitutePolicy Tip Sheet, 07/24/2012
An origin-based tax system for online purchases is simpler and more taxpayer-friendly than a destination-based tax system. In a destination-based tax system, a customer is charged at the rate where the customer is located. The increase in the number of intangible services and property sold over the Internet makes it extremely difficult to determine where the product will be used. There are three problems with a destination-based tax on the Internet. Tax competition among the states would be hindered, it would undercut federalism, and it would push tax rates up. In comparison, states currently tax sales using an origin-based tax system. A consumer is taxed at the rate where the business is physically located. Origin-based taxation would foster competition among the states and would be simpler for businesses to comply with.
Crime, Justice & the LawBy Richard A. Epstein, Hoover InstitutionDefining Ideas, 07/24/2012
The tragedy in Aurora, Colorado is a grim reminder of the helpless position in which innocent people can find themselves at the hands of a maniac. The sad truth is that there is little that any society can do to defend itself against these periodic tragedies. Protection against armed violence is a legitimate social objective. The imposition of a tough registration program will lead to a substantial reduction in the number of guns in circulation. But even tough gun laws may have had little impact on people like James Holmes. The basic point here is that in any gun-free environment (such as that of Virginia Tech), the assailant knows that he will not meet with any immediate armed resistance, and this puts innocent people at risk.
Economic GrowthBy John Steele Gordon, Hillsdale CollegeImprimis, 07/24/2012
America is still a young country. Only 405 years separate us from our ultimate origins at Jamestown, Virginia, while France and Britain are 1,000 years old, China 3,000, and Egypt 5,000. Today we live in a world far beyond the imagination of those who were alive in 1607. The poorest family in America today enjoys a standard of living that would have been considered opulent 400 years ago. And for most of this time it was the United States that was leading the world into the future, politically and economically. This astonishing economic transformation provides rich lessons in examples of what to do and not do.
Crime, Justice & the Law
Pennsylvania Supreme Court Vacates Trial Court’s Denial of a Minor’s Application to Obtain an AbortionBy Steven J. Willis, Jordan E. Pratt, Federalist SocietyArticle, 07/24/2012
On December 22, 2011, the Pennsylvania Supreme Court vacated a trial court’s denial of a minor’s judicial bypass application—an application to obtain an abortion without parental consent. The court held that appellate courts must deferentially review a trial court’s denial of a minor’s petition for judicial bypass. Second, the court held that a trial court may not rely on a minor’s failure to seek her parents’ consent when determining whether she has the requisite maturity and capacity to consent to an abortion. This case is a modest win for pro-life advocates because of its command that appellate courts deferentially review judicial bypass denials. From a national perspective, states with similar judicial bypass statutory regimes may look to this decision when determining what level of appellate review to apply.
Health CareBy Douglas Holtz-Eakin, Michael Ramlet, American Action ForumMemorandum, 07/24/2012
The Congressional Budget Office (CBO) will release its projection of the Affordable Care Act (ACA) budget baseline in the aftermath of the Supreme Court decisions. The new baseline is unlikely to be dramatically different from prior budgetary outlooks because the CBO doesn’t yet have all the information needed to resolve the uncertainty. However, based on information already available, Forum modeling found that the cost of the ACA could rise between $72 to $80 billion between 2014 and 2012 if the six already publicly announced states opt out of the Medicaid expansions. The CBO is not expected to change its projections significantly, as it does not yet have the information to resolve the potential swings in cost.
EducationBy Michael Van Beek, Daniel Bowen, Jonathan Mills, Mackinac Center for Public PolicyPolicy Study, 07/24/2012
Assessing a high school’s effectiveness is not straightforward. Comparing a school’s standardized test scores to those of other schools is one approach to measuring effectiveness, but a major objection to this method is that students’ test scores tend to be related to students’ “socioeconomic” status—family household income, for example, or parents’ educational background. These actors, however, are outside a school’s control. Context and Performance (CAP) Scores and grades are relative and each high school is assessed based on its performance compared to other state high schools; and do not indicate how they compare to scores in other states or countries. Moreover, CAP Scores do not adjust for every factor that may lie outside a school’s control. Consequently, the CAP Report Card improves the quality of information publicly available to Michigan parents, taxpayers, school officials and policymakers.
Budget & TaxationBy Jon Sanders, John Locke FoundationSpotlight, 07/24/2012
Once a popular off-Hollywood venue for filmmakers before state film tax incentives North Carolina is now one of the leaders in a race to the bottom among other states and nations in giveaways to movie production companies. The incentives show that state leaders know that lower taxes and regulations attract industry. So why play favorites with industries? Why not just lower taxes and regulations altogether?
Economic GrowthBy Jon Sanders, John Locke FoundationPolicy Report, 07/24/2012
Cronyism is an umbrella term covering a host of government activities by which an industry or even a single firm or speculator is given favors and support that they could not attain in market competition. This report explains what opens government to cronyism, gives a brief rundown of recent examples of cronyism in North Carolina, and offers several possible reforms.
The Constitution/Civil LibertiesBy Antonin Scalia, Bryan A. Garner, WestBook, 07/24/2012
In this groundbreaking book, Scalia and Garner systematically explain all the most important principles of constitutional, statutory, and contractual interpretation in an engaging and informative style–with hundreds of illustrations from actual cases. Is a burrito a sandwich? Is a corporation entitled to personal privacy? If you trade a gun for drugs, are you “using a gun” in a drug transaction? The authors grapple with these and dozens of equally curious questions while explaining the most principled, lucid, and reliable techniques for deriving meaning from authoritative texts. Meanwhile, the book takes up some of the most controversial issues in modern jurisprudence. The authors write with a well-argued point of view that is definitive yet nuanced, straightforward yet sophisticated.
Economic GrowthBy Daron Acemoglu, Cato InstituteCato Policy Report, 07/23/2012
Economic institutions determine economic incentives and the resulting allocation of resources, investment, and innovation. But it is politics that shapes how economic institutions work. Most societies suffering under extractive economic institutions do so because political power is concentrated in the hands of an elite ruling under extractive political institutions. The recent events in the Middle East and North Africa also highlight the role of politics. The roots of discontent in these countries are economic and social, but those are in turn shaped by political factors. The general population has been repressed and excluded from political power for generations. This all implies a simple but critical conclusion: You can’t succeed economically if you don’t get your politics right. It’s only the details of politics and how the contingent path of history will play out that will determine how successful politically and thus economically these nations will be.
Economic GrowthBy Economics 21, e21: Economic Policies for the 21st CenturyCommentary, 07/23/2012
The President is correct that hard work and intelligence are not sufficient for someone to become a successful entrepreneur. What is also required is a willingness to take risks, and this willingness very much depends on government policy. Academic research has looked at differences in rates of entrepreneurship in the U.S. and Europe and found that higher tax rates reduce the potential returns from entrepreneurship. The President’s vision reveals a deep distrust of labor markets. An entrepreneur’s success may indeed depend on thousands of employees, but he or she had to attract them in a competitive labor market. Large and non-diversifiable risk is the most salient feature of entrepreneurship, yet the President seems to ignore it completely. Taking entrepreneurial activity for granted by assuming it is invariant to tax rates is the easiest way to slow creativity, innovation, and growth.
Monetary Policy/Financial RegulationBy Alabama Policy Institute, Alabama Policy InstituteGuide to the Issues, 07/23/2012
The Fed’s Operation Twist is a continuation of the monetary policy that has been in place for the last four years. Even though interest rates have been held close to zero, there has been little improvement attributable to either the quantitative easing efforts or the last year of Operation Twist. Low interest rates have not encouraged banks to lend more; there is still a significant credit crunch in the market, and it is unclear that continued artificial manipulation of the market is the best or quickest way to end the continued stresses in the financial sector. After four years of failed intervention efforts, the free market may indeed be the best arbiter of interest rates because it will accurately reflect the cost of borrowing capital rather than creating artificial “stimulus” conditions.