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Recent Policy Studies
Foreign Policy/International AffairsBy Fouad Ajami, Hoover InstitutionHoover Digest, 08/02/2012
In the interim, campaign strategist David Axelrod has stayed close to home, with one notable stop in Boston, where he sought to besmirch the gubernatorial record of Mitt Romney. But the foreign policy of Barack Obama is the foreign policy of David Axelrod. Gone is that hallowed past when the legendary George Marshall observed a strict separation between foreign policy and the political play at home. He had refused to cast a vote in presidential elections and he had bristled when the “political people” in President Truman’s circle of advisors intruded into the foreign policy domain. We needn’t exalt the past—presidents always worried about the impact of foreign crises on their standing at home. Still, the subordination of foreign policy to the electoral needs of the Obama campaign stands apart in recent American history. Foreign policy has been masterfully neutralized in the Obamian world, taken off the board in this campaign.
EducationBy Herbert J. Walberg, Hoover InstitutionHoover Digest, 08/02/2012
The numbers reported by the Nation’s Report Card of the National Assessment of Educational Progress (NAEP) show that approximately two-thirds of American public school students achieve below grade level in reading and mathematics. This is old news, and yet reform efforts over three decades have yielded insignificant improvements. The U.S. is near the top of the list in per student spending on public schools and is well known for its advanced technologies. Little used educational technologies could transform our schools from their deplorable status into successful institutions that would bring the vast majority of American children to grade-level performance. Among the technologies available, two in particular, used wisely, show substantial effects: incentives and automated tutoring.
Natural Resources, Energy, Environment, & ScienceBy Steve Stein, Hoover InstitutionPolicy Review, 08/02/2012
Throughout the country, the Sierra Club, Friends of the Earth, the League of Conservation Voters, and similar groups have members on both sides of particular renewable energy projects. But the ensuing conflicts reach well beyond the organizations, and catch all who seek rational energy solutions in an expensive crossfire. Solar power is not nuclear power (unless you call the sun a huge nuclear-fusion reactor), and solar certainly doesn’t have the huge catastrophic possibilities that nuclear fission has. But if the solar industry has to run a gauntlet of lawsuits over every other acre upon which panels and transmission lines can be laid out, very little solar development will happen, at least in America. At some level, environmental groups understand how much of this issue is in their hands. How will they use their power?
Economic and Political ThoughtBy Lawrence Chickering, Anjula Tyagi, Hoover InstitutionPolicy Review, 08/02/2012
When viewed in distributional terms—the left in terms of equality, the right in terms of mobility—justice is impossible, because equality is itself impossible and because when some “get ahead,” others are “left behind.” When justice is understood, however, in terms of empowerment, it becomes possible for everyone. With empowerment, the case for compulsion to achieve equality disappears, and no one needs to be left behind. With empowerment, the distributional focus disappears in favor of values higher than the accumulation of wealth as the defining quality, in public policy, of people’s lives.
Elections, Transparency, & AccountabilityBy Shelley Rigger, American Enterprise InstitutePaper, 08/02/2012
Taiwan’s democratic transition began with baby-step reforms in the late 1970s, accelerated through the 1980s, and reached its apex with the first direct presidential election in 1996. In the sixteen years since that watershed event, Taiwan’s democracy has moved toward consolidation, but the pace of its forward progress has slowed. Although Taiwan shows no sign of returning to the authoritarianism of its past, institutionalizing the gains achieved during the transition has not always been easy. And if backsliding is unlikely, it is not inconceivable that Taiwan might be dragged into a new form of nondemocratic politics imposed by Beijing. Taiwan and its friends must continue to defend its political system energetically lest Taiwan lose its ability to resist the pressures that threaten its democracy.
Economic GrowthBy Joseph P. Nichols, Stephen D. Oliner, Michael R. Mulhall, American Enterprise InstituteWorking Paper, 08/02/2012
This paper constructs land price indexes for a broad set of metropolitan areas in the United States. To calculate the indexes, we estimate a hedonic regression for land prices in 23 large metropolitan statistical areas (MSAs) with a sample of 180,000 land transactions from the mid-1990s through the first half of 2011. The resulting indexes show a dramatic increase in both residential and commercial land prices over several years prior to their peaks in 2006-07 and a steep descent since then. Moreover, a decomposition of the changes in home prices into the contributions from construction costs and land prices shows that land prices were by far the more important driver of the recent boom-bust cycle in home prices.
EducationBy Liv Finne, Washington Policy CenterPolicy Brief, 08/02/2012
Public education is in decline. Nearly one-third of Washington public school students fail to graduate, and another third graduate without the knowledge and skills necessary for college or the workplace. Over half (52%) of public school students entering community or technical colleges must take remedial courses in math, English or reading to catch up. 84% of employers say public schools are not doing a good job of preparing students to succeed in the workplace. Today, Washington ranks nationally 42nd in graduation rates. Many college freshmen are unprepared to take on their coursework. This policy brief describes eight ways to improve public schools including putting the principle in charge, giving parents the choice in choosing schools, transparency, and give teachers more control.
EducationBy Deborah D. Thornton, Public Interest InstitutePolicy Study, 08/02/2012
When did famously independent, self-reliant Iowans decide that parents are not the first and the correct decision-makers about what is best for our children? When did we decide that partisan and union foot-dragging are more important than our children are? Nobel Prize winning economist Dr. Milton Friedman advocated extensively for parental control of children’s education. July 31 is the 100th anniversary of his birth. His scholarship, vision, and leadership encourage us to move forward on serious education reform. This led to the title of this policy study—Lead, Follow, or Get Out of the Way!—Which will review the positive actions and changes in school choice in the rest of the country during the 2012 Legislative sessions, and contrast that to the minor “reforms” passed by the Iowa Legislature.
Economic GrowthBy Amy K. Frantz, Public Interest InstitutePolicy Study, 08/02/2012
For many teens in Iowa, a job is not only a means of earning spending money or saving for a college education, it is a way to gain experience, both at a particular job and the general responsibilities that go along with holding a job. And for those teenagers that graduate from high school and decide not to go on to college, they must find jobs to support themselves and possibly their families. Those who do go to college may work to support their educational endeavors. However, this category of workers often faces difficulty in finding a job. Many teen workers have lower skill levels than adult workers, and part of the benefit of holding a job as a teen is the training they receive as well as learning the basic skills of responsibility and accountability of holding a job. Allowing businesses to hire teen workers at a lower wage level would open up opportunities for more teens to gain this valuable work and life experience.
Health CareBy Victor E. Schwartz, Phil Goldberg & Christopher E. Appel, Washington Legal FoundationLegal Opinion Letter, 08/02/2012
For decades, Congress and the federal judiciary, led by the Supreme Court of the United States, have expressed concern over unwanted disclosures of personal data or private health information. These privacy concerns have been amplified in today’s Internet-driven age, with stories regularly emerging of highly personal information becoming at risk due to leaks and computer hackings, as well as concerns some policy makers have over legitimate endeavors related to tailored Internet marketing. Yet, some federal agencies seemingly cast these concerns aside when they believe forcing disclosure of such personal, private records will serve their purposes. Such is the case with the Federal Mine Safety and Health Administration (MSHA), which has issued a rule requiring mine operators to turn over personal medical records of their employees whenever MSHA seeks this information in auditing a mine’s records.
Budget & Taxation
The Proper Role of Congress in State Taxation: Ensuring the Interstate Reach of State Taxes Does Not Harm the National EconomyBy Joseph Henchman, Tax FoundationTestimony, 08/02/2012
This statement before the U.S. Senate Committee on Commerce, Science, and Transportation is on Congress’s role in the debate over state sales taxation of online purchases. The Constitution empowered Congress with the responsibility to rein in state tax overreaching when it threatened to do harm to the national economy. Consequently, states were not permitted to tax items in interstate commerce at all, from the Founding until approximately the 1950s. There are approximately 9,600 jurisdictions in the United States that collect sales tax. Sales tax can vary by product, by time, and by location in the state. In 7 states, local governments can have a different sales tax base from the state tax base. There are five basic actions that Congress may proceed with in regards to reaffirming, modifying, or repealing the physical presence rule in order to clear up state and local taxes across the country.
EducationBy Thomas J. Kane, Education NextEducation Next, 08/02/2012
In the largest study of instructional practice ever undertaken, the Bill & Melinda Gates Foundation’s Measures of Effective Teaching (MET) project is searching for tools to save the world from perfunctory teacher evaluations. So far, the evidence reveals that schools should try to see effective teaching from multiple angles. Better information on teaching effectiveness should allow for improved personnel decisions and faster professional growth.
Budget & TaxationBy John F. Cogan, et al., Hoover InstitutionWorking Paper, 08/01/2012
This paper estimates macroeconomic impacts of a fiscal consolidation strategy in which the government gradually reduces spending over time in order to reduce the deficit and the growth of the debt. A big question is whether the reduction in government spending reduces GDP in the short run, a concern that has been raised by many economists and policy makers. The results suggest that households are forward looking and they adjust their behavior in response to expectations of future tax and spending policy. The strategy increases GDP in both the short run and the long run relative to the baseline. More generally, the gradual and credible decline in government spending allows the private sector to adjust smoothly to the decline in spending without negative disruptions.
EducationBy James Guthrie, Elizabeth A. Ettema, Education NextEducation Next, 08/01/2012
Not all relevant financial figures are available yet, but reasoned extrapolations from private- and public-sector employment data suggest that U.S. schooling may be on a historic path toward lower per-pupil resources and significant labor-force reductions. If not thoughtfully considered, budget-balancing decisions could damage learning opportunities for schoolchildren. The greatest risk of all is to the past quarter century of efforts to render America’s schools more effective. Unless means are identified for making schools more productive, that is, doing better with less, reform momentum is in serious jeopardy.
Budget & TaxationBy David Block, Scott Drenkard, Tax FoundationFiscal Facts, 08/01/2012
Governor Jerry Brown signed a new California budget on June 27 that depends on voters to approve $15.7 billion in new taxes in order to meet expected expenditures for fiscal year 2012-2013. The tax increases, which will be sent to California voters in November for their consideration as Proposition 30. The package of tax increases raises the California sales tax rate by 0.25 percent to 7.5 percent for 4 years and raises income taxes on those making above $250,000 for 7 years. The income tax increase is retroactive and would apply to all income earned after January 1, 2012.While Governor Brown contends that the income tax increase is necessary to prevent cuts to popular government services, the historical record shows that California’s budget has grown steadily in recent years. Additionally, the plan’s heavier reliance on high income earners will only further exacerbate California’s troubles with revenue volatility, impacting the state’s ability to fund future government programs.
EducationBy Andrew P. Kelly, Patrick J. McGuinn, American Enterprise InstituteReport, 08/01/2012
An emerging wave of education reform advocacy organizations (ERAOs) are working to pull parents into larger policy debates around school reform and mobilize them to lobby policymakers, testify in front of school boards, and vote for favored candidates. The ERAO landscape is dominated by young organizations with limited resources and influence. Questions linger regarding these groups’ ability to move into new states and districts, increase the number of parents involved, and become a lasting political bloc of reform-minded parents. Parents are more likely to become engaged when they see an immediate payoff for their involvement or an immediate threat to their school or program, so ERAOs should consider how to foster vibrant networks, highlight policy victories, and otherwise demonstrate why their issues matter.
Health CareBy Michael F. Cannon, Michael D. Tanner, Cato InstituteBook, 08/01/2012
This new eBook assembles the best of the Cato Institute’s work on Obamacare, and on how free markets are the only way to make health care better, more affordable, and more secure. These articles, written by over a dozen national experts, explain why repealing Obamacare, and pursuing solid, proven solutions, is real health care reform.
Economic GrowthBy Richard A. Epstein, Hoover InstitutionDefining Ideas, 08/01/2012
Right now, the patent system is under major attack from a large number of scholars and judges who think that the way to industrial progress lies through an expanded public domain. The current three-part attack on the patent system starts with the proposition that the requirements needed to obtain a patent should be restricted, especially in the areas of software and business method patents. Second, the ability to license patents should be restricted. Finally, the remedial protections given to patents by way of damages and injunctions should be weakened. The clear thrust of the current anti-patent fervor is that innovators do not receive sufficient legal protection for their patents even when they did invent them. We need some pushback against this overwrought position.
Monetary Policy/Financial RegulationBy Emily McClintock Ekins, Mark A. Calabria, Cato InstitutePolicy Analysis, 08/01/2012
During the financial crisis of 2008, the financial markets would have been better served if the credit rating agency industry had been more competitive. The Securities and Exchange Commission’s designation of Nationally Recognized Statistical Rating Organizations (NRSROs) inadvertently created a de facto oligopoly, which primarily propped up three firms: Moody’s, S&P, and Fitch. The lack of competition allowed for greater market complacency. Government regulatory use of credit ratings inflated the market demand for NRSRO ratings, despite the decreasing informational value of credit ratings. Given the importance of our capital infrastructure and the power of credit rating agencies in our financial markets, and despite the good intentions of the uses of the NRSRO designation, it is not worth the cost and should be abolished. Regulators should work to eliminate regulatory reliance on credit ratings for financial safety and soundness.
Natural Resources, Energy, Environment, & ScienceBy H. Spencer Banzhaf, Stanford UniversityBook, 08/01/2012
The environmental justice literature convincingly shows that poor people and minorities live in more polluted neighborhoods than do other groups. These findings have sparked a broad activist movement, numerous local lawsuits, and several federal policy reforms. Despite the importance of environmental justice, the topic has received little attention from economists. And yet, economists have much to contribute, as several explanations for the correlation between pollution and marginalized citizens rely on market mechanisms. Understanding the role of these mechanisms is crucial to designing policy remedies, for each lends itself to a different interpretation to the locus of injustices. Moreover, the different mechanisms have varied implications for the efficacy of policy responses—and who gains and loses from them. This examination of environmental justice from the perspective of economics, evaluates why underprivileged citizens are overexposed to toxic environments and what policy can do to help.
Budget & TaxationBy Scott Drenkard, Tax FoundationFiscal Facts, 07/31/2012
Retail sales taxes are one of the more transparent ways to collect tax revenue. While graduated income tax rates and brackets are complex and confusing to many taxpayers, the sales tax is easier to understand: people can reach into their pocket and see the rate printed on a receipt. Less known, however, are the local sales taxes collected in 37 states. These rates can be substantial, so a state with a moderate statewide sales tax rate could actually have a very high combined state-local rate compared to other states. This report provides a population-weighted average of local sales taxes in each state in an attempt to give a sense of the statutory local rate for each state.
Transportation/InfrastructureBy Leonard Gilroy, Robert Poole, Reason FoundationPolicy Brief, 07/31/2012
During the last two decades Ohio government has grown at an unsustainable rate. General Revenue Fund (GRF) expenditures, for example, grew 41 percent over the rate of inflation between 1990 and 2009. This cannot continue if Ohio is to remain economically competitive with a lean and efficient tax and regulatory structure inviting to new business creation. Efficient and effective government should always be the goal, but in a time of tight budgets even as the public demand for core services remains high, it makes little sense to waste taxpayer dollars, or dig deeper into their pockets, when services can be better performed by the private sector. If Ohio is to explore this type of reform a great many myths and misconceptions must be cleared away so that taxpayers and policymakers alike have a clear understanding of the nature and structure of these partnerships.
Economic GrowthBy Anthony Kim, Ambassador Terry Miller, The Heritage FoundationSpecial Report, 07/31/2012
July 31, 2012, is the one hundredth anniversary of the birth of the great economist and thinker Milton Friedman. It was Friedman who first suggested that the economic freedom of countries be measured and monitored, and The Heritage Foundation has been doing so since 1995 in its Index of Economic Freedom. Friedman’s most important legacy is unquestionably the improvement in living standards of hundreds of millions of people around the world thanks to the implementation of his theories. Unfortunately, the policies of an increasingly leviathan government have placed America on a path that diverges sharply from its historical quest for greater freedom. At Milton Friedman’s centennial, Americans should renew their commitment to economic freedom, as well as their confidence that a people who are free to choose will ensure their own future well-being.
Natural Resources, Energy, Environment, & ScienceBy William Yeatman, Competitive Enterprise InstituteTestimony, 07/30/2012
The Environmental Protection Agency (EPA) is infringing on the States’ rightful authority on visibility improvement policy pursuant to the Clean Air Act. The costs of EPA’s imposed Regional Haze plans are significant; the benefits, however, are suspect. According to peer-reviewed research, the visibility improvement achieved by EPA’s Regional Haze plans is imperceptible to the average person. EPA’s Regional Haze program is imposing significant costs on utilities in several States—costs that will ultimately be borne by ratepayers—in order to achieve visibility improvements that are imperceptible to most people.
Foreign Policy/International AffairsBy Luke Coffey, The Heritage FoundationIssue Brief, 07/30/2012
In light of the uprisings across the Middle East and North Africa, the continued threat in the region from al-Qaeda, and the nuclear threat and state-sponsored terrorism from Iran, many in NATO have rightly decided to place a renewed focus on working with regional partners on its periphery. NATO already has structures in place to better cooperate with partners in this part of the world, but little has been done to enhance these relationships.
Health CareBy Kathryn Nix, The Heritage FoundationIssue Brief, 07/30/2012
In the wake of the Supreme Court’s ruling on Obamacare, Americans should remember that higher taxes are not the only negative consequence of the law. Obamacare limits patient choice through expansive federal regulation of the insurance market, government interference in the decisions patients make with their doctors, and increased dependence on government health programs. Obamacare limits patient choice either directly or indirectly in a variety of ways. This Heritage Issue Brief describes 10 Obamacare provisions to be aware of.
National SecurityBy Matt Mayer, The Heritage FoundationIssue Brief, 07/30/2012
The U.S. Department of Homeland Security (DHS) just announced the final allocations for the 2012 homeland security grants. Since 9/11, Congress has allocated over $40 billion in funds to states and localities. The majority of this funding came from DHS, but funding also came from the U.S. Department of Justice (DOJ), the U.S. Department of Health and Human Services (HHS), and other federal departments and agencies. What has all of this funding bought taxpayers nearly eleven years later? Even taking DHS’s view, not as much as it should have bought. Given the growing federal fiscal crisis, Congress needs to dramatically change where those grants go.
Foreign Policy/International AffairsBy Derek Scissors, Dean Cheng, The Heritage FoundationIssue Brief, 07/30/2012
China National Offshore Oil Corporation (CNOOC) this week offered to buy Canada’s Nexen, Inc., for $15 billion. Nexen’s board is recommending the bid to shareholders. If completed, this would be the single largest acquisition that Chinese companies have made in the outward investment splurge that started in 2005. It raises a series of issues for American policymakers to consider. The most basic point is that the two sides freely agreeing to make this deal is a good thing; it is how market economies should work. Beyond that, it underscores that the People’s Republic of China (PRC) has the means to diversify its access to key resources. China cannot simply be cut off from accessing international oil or the technology associated with it. In addition, China’s high valuation of Canadian energy is at odds with the recent American decision to inhibit the development of the U.S.–Canada energy relationship by stalling the Keystone XL pipeline.
Budget & TaxationBy Jessica Melugin, Competitive Enterprise InstituteOn Point, 07/30/2012
The rapid growth of online retailing has been accompanied by increasing calls by state and local officials to allow them to capture more sales tax revenue and by bricks-and-mortar retailers to “level the playing field.” The Marketplace Equity Act (H.R. 3179) seeks to capture more tax revenue for states on Internet purchases. Traditional retailers, states, and localities, urge Congress to act in the name of “fairness,” but consumers will perceive this change as a tax increase. Certainly, there are inequities in the way online sales are taxed, but the proposed cure is worse than the disease. If Congress is to consider Internet sales tax policy, an origin-based approach would address the legitimate need for sales tax reform and avoid H.R. 3179’s harmful consequences.
WelfareBy Robert Rector, Katherine Bradley, The Heritage FoundationBackgrounder, 07/30/2012
The food stamp program is due for reauthorization as part of a new farm bill. It is the second most expensive means-tested aid program, increasing from $19.8 billon in 2000 to $84.6 billion in 2011, and President Barack Obama has proposed a budget to keep food stamp spending at sharply elevated levels for the next decade. The national debt has topped $16 trillion and will continue to grow rapidly for the foreseeable future. To preserve the economy, government spending, including welfare spending, must be put on a more prudent course. Congress and the Administration should transform food stamps into a program that encourages work and self-sufficiency, close eligibility loopholes, and, after the recession ends, reduce food stamp spending to pre-recession levels.
National SecurityBy Gary Roughead, Jeremy Carl, Manuel Hernandez, Hoover InstitutionBook, 07/30/2012
Powering the Armed Forces offers a perspective on the impressive work now under way in the US military forces to address energy challenges and ultimately achieve energy security. Drawn from a Hoover Institution conference in December 2011, the contributors reveal how energy critically relates to our national security mission and to the effectiveness and safety of our men and women fighting on land, at sea, and in the air—and show that the Defense Department is committed to improving our nation’s energy position.
Information TechnologyBy Seth L. Cooper, Free State FoundationPerspectives from FSF Scholars, 07/30/2012
Monetary Policy/Financial RegulationBy Mark A. Calabria, Cato InstituteTestimony, 07/30/2012
Had Congress fulfilled its responsibilities in previous years in regards to such entities as Fannie Mae and Freddie Mac, we might have avoided the recent financial crisis. As the Consumer Financial Protection Bureau (CFPB) runs the same risk of politicizing our consumer credits markets in a manner similar to which our mortgage market was so highly politicized, aggressive Congressional oversight is needed in order to both avoid future financial crises and to maintain a healthy economy. Restructuring or eliminating the agency would certainly improve outcomes, but such a change alone would be insufficient to cure everything holding back our economy. Of greater concern is the flawed body of consumer protection law inherited by the CFPB. Eliminating or restructuring the CFPB in the absence of significant change to the underlying statutes would offer only modest improvements.
Economic GrowthBy David R. Henderson, Mercatus CenterResearch, 07/30/2012
Cronyism is the substitution of political influence for free markets. It comes about when government has a lot of power over private-sector decisions and when the government officials in power have great discretion over how to use it. Cronyism is not simply a zero-sum game that takes from some and gives to others; it is negative-sum. The losses to the losers substantially outweigh the gains to the winners. In short, cronyism destroys wealth. By shifting power to government, cronyism makes political power more important and increases the competition for that political power. The way to reduce or end cronyism is to reduce or end that government power.
Taxpayers Don’t Stand a Chance: Why Battleground Ohio Loses No Matter Who Wins (and What to Do About It)By Matt A. Mayer, Matt A. MayerBook, 07/30/2012
Taxpayers Don’t Stand a Chance is a study on the battleground state of Ohio, including a microanalysis of Ohio’s political landscape. This book describes in detail how Ohio went from being an economic and political leader to a national laggard. Ohio’s fall occurred because the political system puts entrenched interests ahead of taxpayers, and politicians spend precious resources on the wrong issues or make things worse. With the news media’s failure to give equal coverage to conservative ideas and to expose government excesses, voters can’t make informed decisions. The political and journalistic failures stop key economic reforms from being implemented, make it impossible for Ohioans to prevent higher taxes, and keep Ohio indentured to labor unions. These failures are happening in states and localities everywhere. This book does more than just cite problems, it lays out major reforms aimed at giving taxpayers a chance to fight back and win.
Monetary Policy/Financial RegulationBy Philip Booth, Michael Jeffers, Institute of Economic AffairsReport, 07/30/2012
At the end of June 2012, news of a further scandal in the banking industry broke – although, there was widespread knowledge about this problem within the industry. One UK bank, Barclays, had fines levied by the US and UK authorities for manipulating a key interest rate index called LIBOR. Other banks are still under investigation. LIBOR is an important market interest rate indicator because it measures the rate of interest at which banks can lend to each other. This Reader combines several short articles on the LIBOR scandal looking for a deeper understanding of the crisis and suggests that governments have taken the wrong approach.
Monetary Policy/Financial RegulationBy Steven Horwitz, Institute of Economic AffairsDiscussion Paper, 07/30/2012
For many, the Great Recession and the boom that preceded it are evidence of the failure of the supposed deregulation of financial markets in the last decade and therefore constitute an indictment of capitalism more broadly. However, a closer look at both monetary policy and the effects of other government interventions on the financial system tells a very different story. The Great Recession was not a failure of free markets. Rather it was a classic example of the undesirable unintended consequences of government intervention, both through expansionary monetary policy and misguided attempts to bolster the housing market in the USA.
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.