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InsiderOnline Blog: November 2007

The Coming Week – Monday, December 3, 2007

Monday: Learn how “healthy aging” can help Europe tackle its demographic difficulties. The American Enterprise Institute hosts Nicholas Ebertstadt and Hans Groth, co-authors of Europe’s Coming Demographic Challenge: Unlocking the Value of Health.

Tuesday: Find out if our election systems can handle another close election. The American Enterprise Institute hosts Edward Foley, Steven Huefner, and Daniel Tokaji, co-authors of From Registration to Recounts: The Election Ecosystems of Five Midwestern States.

Wednesday: Hear how market-oriented policies can help the United States meet the key economic challenges posed by globalization. U.S. Trade Representative Susan Schwab delivers the keynote luncheon address at this Independent Women’s Forum conference.

Wednesday – Saturday: Join veteran and newly elected state legislators for three days of intensive discussions on the critical issues facing our country. ALEC hosts its 2007 States & Nation Policy Summit.

Thursday: Review the post-World War II history of conservatives in the GOP. Donald Critchlow discusses his new book, The Conservative Ascendancy, at The Heritage Foundation.

Thursday: Discover how to repeal the Alternative Minimum Tax and overhaul the tax code. The Cato Institute hosts a Capitol Hill Briefing featuring Rep. Paul Ryan (R-Wis.), and Cato’s Chris Edwards and Daniel Mitchell.

Friday: Learn how promoting democratic institutions is the best strategy for ending human trafficking. The Heritage Foundation hosts a seminar featuring Mark Lagon, Director of the Office to Monitor and Combat Trafficking in Persons at the Department of State.

Posted on 11/30/07 02:59 PM by Alex Adrianson

Heritage on Video

Heritage in Focus: There are many options for handling nuclear waste safely.

At Heritage: The argument of To Empower People—that societies need mediating institutions such as families, neighborhoods, churches, and voluntary associations—is still relevant today. … Sunni-Shia conflict in Iraq has implications for the stability of the region and for the world economy. … Conservatives need a new strategy for promoting limited government. … The crisis in Pakistan is a problem for U.S. efforts to fight extremists in the region. … Isn’t it time to grow up?

Posted on 11/30/07 12:37 PM by Alex Adrianson

Democrats Hurt Their Own Constituents With Higher Taxes

Soaking the rich has long been a political strategy associated with liberals and Democrats. But the Democrats’ image as the party of the downtrodden doesn’t quite match reality. A new analysis by Heritage’s Mike Franc reveals that elected Democrats represent plenty of wealthy people. In fact, most of the wealthiest congressional districts today are represented by Democrats.

Writes Franc:

Using Internal Revenue Service data, the Heritage Foundation identified two categories of taxpayers—single filers with incomes of more than $100,000 and married filers with incomes of more than $200,000—and combined them to discern where the wealthiest Americans live and who represents them.

Democrats now control the majority of the nation’s wealthiest congressional jurisdictions. More than half of the wealthiest households are concentrated in the 18 states where Democrats control both Senate seats.

Franc also observes that the congressional leadership of the parties displays the same pattern. Speaker Nancy Pelosi and Majority Leader Steny Hoyer represent districts that are much wealthier than those of the Republican leader John Boehner and whip Roy Blunt.

So the question for Democrats in Congress is “Do they know their own constituencies when they continue to press for tax increases?” And what will voters in those districts think of such policies? Will voters in these districts, wonders Franc, act like pledges from the movie Animal House?

Perhaps they will accept these tax rises as a political and economic hazing and greet each new tax hike with: “Thank you, sir. May I have another?”

Posted on 11/30/07 10:45 AM by Alex Adrianson

Social Service Agency Run Amok

Social service agencies seem to have too much power to rip families apart. In Britain, sadly, they don’t even need much evidence to do so, as a story this week in the Daily Mail illustrates.

Seven years ago Fran had an eating and selfharming disorder and spent 13 months in a psychiatric hospital followed by nine successful months of counselling.

Now 22, and with her emotional troubles behind her, Fran is outraged that she should be judged a risk to herself and her child despite a fistful of medical reports that dispute this.

Last week, fearing the worst, Fran moved from her home in Hexham in Northumberland to Birmingham, where she hoped a different authority would treat her more sympathetically.

But with the birth so close, she felt she couldn't take any risks with bureaucracy and on Wednesday, Fran took an even more drastic step. She got on a flight bound for Europe—and went into hiding.

Fran’s flight was prompted by an agency telling her that her baby would be taken from her only minutes after her birth.

Dead babies make bad publicity; mothers treated unfairly by bureaucracies tend not to make the news at all—unless they do something dramatic like flee the country. So human services agencies have every incentive to avoid the first problem and not worry at all about the latter problem. But that should not be acceptable in a free society. Putting a government agency in charge of deciding who might be a danger is a dangerous business.

Hat tip: Chuck Muth’s News and Views.

Posted on 11/29/07 05:51 PM by Alex Adrianson

Covert Racism in New York

At National Review Online’s the Corner, Stanley Kurtz notes an interesting case filed by the Center for Individual Rights:

The suit challenges New York’s policy of excluding white and Asian students from test preparation courses because of their race. What makes this case particularly interesting is that the program in question does not openly claim to exclude Asians or whites. Instead the city claims that any child who qualifies for a free school lunch can participate in this special test-prep program. Yet this claim to rely on economic criteria turns out to be false, or at least that what CIR’s suit alleges. CIR may have caught New York red-handed, since CIR’s lawyers claim to have obtained an internal memo from the city Department of Education that calls for excluding Asians and whites from the program. …

If CIR is right, it will not be the first time liberal elites have covertly undermined prohibitions against preferences. We’re sometimes told that race-neutral programs based on economic status can substitute for preferences. But even here, trust levels are evaporating. I wish CIR well in its suit. Public exposure is the best way to fight overt and covert preferences by race.

Posted on 11/29/07 05:17 PM by Alex Adrianson

Racism in Hawaii

The House-approved bill creating a separate race-based government for native Hawaiians is an anti-immigrant measure. Writes George Will:

There are 400,000 Native Hawaiians nationwide who will be eligible to participate in creating the [Native Hawaiian Government Entity]. Native Hawaiians are 20 percent of Hawaii’s population. They are defined as direct lineal descendants of indigenous peoples who lived on the islands before 1893 and who exercised sovereignty then—an unintelligible provision because the queen monopolized sovereignty. She, however, was more enlightened than Akaka. She did not distinguish between Native Hawaiians and immigrants, who served in her government.

Posted on 11/29/07 05:11 PM by Alex Adrianson

Power to the Consumer

Greg D’Angelo of the Heritage Foundation explains how health care tax credits can help control health care expenditures and expand access to health insurance:

Today, employers and government officials, not individuals, make the key health care decisions—particularly what is, or is not, covered in health plans. Few individuals and families actually select the health insurance that best meets their personal needs and preferences. So, health plans respond directly to employers and government officials, and they do not need to directly compete for consumers’ dollars. Therefore, they often have no compelling economic incentive to provide value to the patient for the money the patient spends either through an employer premium or a tax bill.

If the federal tax code were changed to provide direct tax relief to individuals and families, they would have the ability to select the health insurance that they want and need—whether obtained through their employer or a different organization. More patients would become price-sensitive, and health plans would be incentivized to provide value for money. Employers and government officials are no substitute for individuals when it comes to making health care decisions.

Posted on 11/29/07 05:10 PM by Alex Adrianson

Needed: Property Rights for Water

More and more, water is becoming the object of political conflict. That’s what happens, of course, when a resource is rationed by politics instead of markets. James G. Workman of hte Property and Environment Research Center writes:  

The real threat from drought isn’t economic; it’s political. More than oil, scarce water splits nations, rations freedom and erodes trust.

Alabama, Florida and Georgia sued over dwindling reservoirs. Maryland challenged Virginia over Potomac River currents for the first time since the Civil War.

Southwest states pull apart Colorado River remnants. Midwest states ally with Canada to seal off Great Lakes water from thirsty regions. North Carolina bans nonessential water use. Tennessee towns cut off household water 21 hours per day. Atlanta sacrifices showers, gardens and lawns. Georgia urges: “Pray for rain.”

Instead, people lose faith, for good reason: All models predict a drier winter, protracted droughts and a 30-year doubling of thirst.

These dramatically shifting projections collide with rigid public water systems. Centralized top-down allocation barely worked when and where water was abundant. Such days and places are vanishing, perhaps forever—unless a rights-based market mechanism for water can emerge.

Posted on 11/27/07 04:57 PM by Alex Adrianson

Bulgaria Adopts Flat Tax

Good news: Bulgaria has joined the flat tax club. Last week the parliament adopted one income tax rate of 10 percent. The Institute for Market Economics, Bulgaria’s free market think tank, deserves a lot of the credit for building support for the flat tax.

Also, Cato’s Chris Edwards offers some perspective:

In this country [the United States], many pundits and presidential candidates would reverse President Bush’s modest reduction in the top income tax rate from 40% to 35%. Those rates are more than three times higher than the new flat tax rate in Bulgaria, a former communist country.

Posted on 11/27/07 03:46 PM by Alex Adrianson

Another Iron Fist

Hugo Chavez seems like a dictator now, but it may get much worse. On December 2, Venezuela will hold a national referendum to amend the Venezuelan constitution to give Chavez more power. Reason magazine’s Steve Chapman sums up what would happen if the referendum is approved:

The changes would not only repeal the two-term limit on his office, allowing him to serve for life, but also transfer virtually all power to one person: the president. He would gain the authority to supersede local governments on a whim, declare a state of emergency anytime it suits him and seize farms and processing plants if he deems it necessary for “food security.”

Why would anyone vote for that? The answer is a combination of benefits and intimidation. The package

includes such enticements as a new six-hour workday and expanded social security benefits. Other reasons: Government control of the media makes it hard for opponents to get their message out, and some dissenters are boycotting because they see the plebiscite as rigged against them.

Posted on 11/27/07 03:05 PM by Alex Adrianson

Come for the Nightclubs, Stay for the Parks

Bars and bright lights may attract singles to certain metropolitan regions, but most people eventually marry and start a family. According to Joel Kotkin, writing in today’s Wall Street Journal, families choose to live where they find work, affordable housing, and easy commutes; and regions that emphasize those priorities do a much better job of retaining highly skilled workers.

For much of the past decade, business recruiters, cities and urban developers have focused on the “young and restless,” the “creative class,” and the so-called “yuspie”—the young urban single professional. Cities, they’ve said, should capture this so-called “dream demographic” if they wish to inhabit the top tiers of the economic food chain and enjoy the fastest and most sustained growth.

This focus—epitomized by Michigan Gov. Jennifer Granholm’s risible “Cool Cities” initiative—is less successful than advertised. Cincinnati, Baltimore, Cleveland, Newark, Detroit and Memphis have danced to the tune of the hip and the cool, yet largely remain wallflowers in terms of economic and demographic growth. Instead, an analysis of migration data by my colleagues at the Praxis Strategy Group shows that the strongest job growth has consistently taken place in those regions—such as Houston, Dallas, Charlotte and Raleigh-Durham—with the largest net in-migration of young, educated families ranging from their mid-20s to mid-40s.

Urban centers that have been traditional favorites for young singles, such as Chicago, Boston, New York, Los Angeles and San Francisco, have experienced below-average job and population growth since 2000. San Francisco and Chicago lost population during that period; even immigrant-rich New York City and Los Angeles County have shown barely negligible population growth in the last two years, largely due to a major out-migration of middle class families.

Posted on 11/27/07 02:26 PM by Alex Adrianson

Why Do Democracies Sometimes Reject Individual Liberty?

A couple weeks ago, I had the opportunity to attend the Atlas Foundation’s annual Freedom Dinner. Francisco Flores, former President of El Salvador, gave a great lecture on the electoral success of Leftism in Latin America. Take a look:

Posted on 11/21/07 09:00 AM by Alex Adrianson

The Coming Week – Monday, November 26, 2007

Tuesday: Assess the problems, promises, and prospects of social venture philanthropy at the Hudson Institute.

Tuesday: Learn how many bureaucrats it takes to control the border. The Ashbrook Center hosts Helen Krieble.

Wednesday: Find out if feminism discriminates against men. The Cato Institute hosts author James Sterba.

Thursday: Celebrate the one-year anniversary of FederalSpending.org. OMB Watch and the Sunlight Foundation offer a look at what’s ahead for the Web site that lets citizens Google their tax dollars.

Thursday: Take a look back at the seminal To Empower People. The Heritage Foundation hosts a seminar on the classic book that laid the foundations for welfare reform.

Posted on 11/20/07 06:13 PM by Alex Adrianson

Will the Supreme Court Review D.C.’s Gun Ban?

The Supreme Court will likely announce soon whether it will review the Parker decision striking down the District of Columbia’s de facto ban on gun ownership. While that decision may have been a rare affirmation by the legal system of an individual right to keep and bear arms, it’s important to remember, as David Kopel points out in yesterday’s Fort Worth Star-Telegram, that D.C.’s gun ordinances are the most extreme anti-gun laws in the country. The nation’s capital doesn’t just regulate guns, it effectively outlaws gun ownership.

The District of Columbia, says Kopel, is actually out of step with the rest of the country and most of Europe. Today 45 states have laws that pre-empt cities from banning handgun possession. In 1998, Wisconsin responded to gun-ban campaigns by adding a right-to-arms clause to its constitution. And, says Kopel, “In Europe, almost all nations allow the possession of licensed handguns. Of the exceptions—Russia, Luxembourg, England, Scotland and Ireland—all but Ireland have murder and violent crime rates much worse than that of their neighbors and other nearby countries that don’t ban handguns.”

Alan Gura, lead attorney for the plaintiffs in Parker, has said he wants the Supreme Court to review the case so that a strong gun-rights precedent will be set. A gambler might recognize Gura as the smart money. He expects to win.

Update: The Supreme Court has announced that it will review the D.C. gun ban case, per the Washington Post, which reports the case likely will be heard in March and decided by June of 2008.

Posted on 11/20/07 01:46 PM by Alex Adrianson

This Week on the Hill

Posted on 11/20/07 10:47 AM by Alex Adrianson

St. Louis: Citizen Can’t Use His Property to Protest the City Taking His Property

The city of St. Louis has told a property owner that he must remove a mural protesting eminent domain abuse. The mural just happens to adorn a building that the city plans to acquire through eminent domain.

According to the city, resident Jim Roos’s mural violates city sign codes. The city agency that made that determination is also the city agency with eminent domain power over Roos’s neighborhood.

Roos owns and manages affordable housing properties. The city wants to condemn the building in order to make way for private commercial development. If the city succeeds, it will be the third time he has had property taken through eminent domain.

The Institute of Justice has challenged the city’s action in federal court as a violation of Roos’s First Amendment rights. In a press release, Nick Dranias, staff attorney at the Institute for Justice Minnesota Chapter, said:

Jim’s mural is a powerful, unique and low-cost protest to the city of St. Louis’ repeated abuse of eminent domain. The city wants to take away the most effective means he has of protesting the city’s own abuse and raising awareness of the need for statewide eminent domain reform.

Posted on 11/19/07 05:50 PM by Alex Adrianson

When Government Pays for Health Care

New Zealand is very conscious of its budgetary waistline—so much so that it makes immigrants’ waistlines its business, too. The country requires new immigrants to have a healthy body mass index; an unhealthy BMI would portend future health care outlays by the government.

FOX News recently reported on the travails of one British woman whose attempts to immigrate to New Zealand have so far been foiled by the regulations. Her husband, having successfully shed pounds, has already immigrated to New Zealand. (Hmmm.)

When government pays for health care, it has an interest in making citizens be healthy—i.e., it has an interest in forcing citizens to make lifestyle choices they wouldn’t make on their own. At the same time, when government finances health care, it shields individuals from the financial consequences of unhealthy choices. People should be free to eat all the double cheeseburgers they want, as long as they are willing to pay for their own coronary bypass.

Posted on 11/19/07 04:18 PM by Alex Adrianson

Learn from Government Failure

In today’s Washington Post, Douglas J. Besharov provides a nice primer of things to think about before embracing large-scale government solutions to social problems. What separates liberals from conservatives, he says, is not a desire to help people, but an insensitivity to the limits of what government can do.

Posted on 11/19/07 02:57 PM by Alex Adrianson

Progress in Africa

Economic growth in Africa is good (5.4 percent annually in the past decade), and better policy choices have played a key role, reports BBC World:

The World Bank’s chief economist for Africa, John Page, said he is “broadly optimistic” that there’s a fundamental change going on in Africa.

“For the first time in about almost 30 years we’ve seen a large number of African countries that have begun to show sustained economic growth at rates that are similar to those in the rest of the developing world and actually today exceed the rate of growth in most of the advanced economies,” he told the BBC.

The key, said Mr Page, was that “Africa has learnt to trade more effectively with the rest of the world, to rely more on the private sector, and to avoid the very serious collapses in economic growth that characterized the 1970s, 1980s and even the early 1990s.”

Hat tip: It’s Getting Better All the Time

Posted on 11/19/07 11:46 AM by Alex Adrianson

The Coming Week – Monday, November 19, 2007

Monday: Learn about the importance of American freedoms to the future of Africa. The Heritage Foundation hosts Charl Van Wyck, Director of Africa Christian Action.

Thursday: Be thankful.

Posted on 11/16/07 02:02 PM by Alex Adrianson

Heritage on Video

Heritage in Focus: Marriage leads to positive economic outcomes.

At Heritage: Hosting a U.S. missile defense site is in the interest of the Czech Republic. … Justice Clarence Thomas is a formidable intellectual defender of the United States Constitution. … The United Nations has failed to confront genocide.

Posted on 11/16/07 01:38 PM by Alex Adrianson

America Is Still the Land of Opportunity

Most of those who were poor a decade ago have been able to move into higher income groups, according to a new study by the Department of the Treasury. Tracking 96,700 tax filers, the study found that of the poorest one-fifth in 1996 58 percent had moved into a higher income quintile by 2005. Twenty-five percent had moved into either the middle or upper-middle fifth, and 5.3 percent had made it all the way into the top fifth. As a whole, the bottom fifth increased its real income by 90.5 percent.

The study also found that most of those in the top fifth in 1996 had moved into a lower group a decade later.

The Wall Street Journal editorializes:

The political left and its media echoes are promoting the inequality story as a way to justify a huge tax increase. But inequality is only a problem if it reflects stagnant opportunity and a society stratified by more or less permanent income differences. That kind of society can breed class resentments and unrest. America isn't remotely such a society, thanks in large part to the incentives that exist for risk-taking and wealth creation.

The great irony is that, in the name of reducing inequality, some of our politicians want to raise taxes and other government obstacles to the kind of risk-taking and hard work that allow Americans to climb the income ladder so rapidly. As the Treasury data show, we shouldn't worry about inequality. We should worry about the people who use inequality as a political club to promote policies that reduce opportunity.

Posted on 11/16/07 12:38 PM by Alex Adrianson

A Problem Every Country Should Have

According to the government’s own estimates, most adults with limited funds for food are also overweight.

This week, the USDA released its annual report on household food security, which finds that 12.5 million households, about 11 percent of total households, experienced food insecurity during 2006. Those households include about 35 million people.

In a new paper for the Heritage Foundation, Robert Rector points out that the government’s own data show that 70 percent of adults classified as “food insecure” are actually overweight or obese as measured by Body Mass Index. That is very close the percentage of all adults who are obese or overweight. In fact, women classified as “food insecure” are more likely to be obese or overweight than women who are not classified as “food insecure.”

Rector concludes that, contrary to what some poverty activists claim, the USDA data do not make the case for increased funding of food programs such as food stamps. Giving low-income people more money for food is likely to increase the proportion who are overweight or obese.

Posted on 11/16/07 11:38 AM by Alex Adrianson

Getting the Case for Regulation Backward

More channels and more competition in the cable industry doesn’t count for much in the eyes of Federal Communications Commission Chairman Kevin J. Martin. In spite of the fact that cable subscribers today have more channels than ever before, the chairman is planning a broad regulatory agenda aimed at increasing diversity in the cable TV industry. So what in today’s 531-channel cable TV universe has brought about this sudden need for more diversity through regulation?

The answer is a 23-year-old law. Before anyone ever dreamed of a whole channel devoted just to gardening, Congress passed a law that said that when 70 percent of households had access to a cable TV service offering at least 36 channels, and 70 percent of those households actually subscribe to such a service, then the Federal Communications Commission would have additional regulatory powers.

According to various news reports, the chairman expects a forthcoming FCC report to show that those triggers have been met and therefore the agency may promulgate new regulations on the industry. Such regulations could include limits on how big a cable company may get, regulation of leased access rates, extending indecency regulation to cable, and requiring providers to offer a la carte pricing instead of bundled tiers.

At the Progress & Freedom Foundation, Adam Thierer is a bit incredulous that the second  trigger (70 percent of those with access subscribe) has been met:

… it seems that the only way the FCC could conclude that the industry is over the 70% mark is by including telecom providers in the count, since they now also provide wireline video services. But if the FCC did so, it would completely undercut the logic of the rule since the agency would be counting new competitors against cable in order to regulate them! Increased competition should lead to decreased regulation, not more. Moreover, in recent months, press and industry reports have been filled with news of declining cable subscribership as they lose customers to satellite and telco operators. For these reasons and others, it’s highly unlikely that the cable industry has crossed the second 70% threshold.

Chairman Martin may think that the cable TV market doesn’t offer enough choices, but back in 2003, the FCC itself concluded: "We are moving to a system served by literally hundreds of networks serving all conceivable interests."  As of 2005, FCC data show that there were 531 cable TV channels.

Experience shows that when regulators step into an industry, it becomes the industry’s business to make regulators happy instead of consumers; and regulators don’t know as well as consumers what consumers want. The chairman’s agenda is bad news.

Posted on 11/16/07 11:04 AM by Alex Adrianson

Another Vision of Development

Extensive government planning of economic activity doesn’t work! If that doesn’t sound like a news flash to you, then you must be one of those who don’t see eye-to-eye with the United Nations. Since 1987, the United Nations has endorsed a concept called “sustainable development.” The agenda of “sustainable development” is inspired by the nightmare scenario of a world economy that will one day come screeching to a halt because it has used up limited, environmentally sensitive resources. The agenda outlined to prevent the nightmare consists of placing large tracts of land off-limits for economic development and otherwise regulating the use of land, eliminating man-made chemicals, limiting carbon-dioxide emissions through controls on the use of energy, and controlling the growth of population. Some advocates want to throw a little wealth redistribution into the mix, too.

All in all, it’s a program of limits and pessimism about the future. But there is an alternative. The Freedom 21 Agenda for Prosperity sees free markets, property rights, the rule of law, fighting corruption in developing countries, and sound science as the solution to securing prosperity both in the present and in the future. These elements, say proponents of the Freedom 21 Agenda, give individuals incentives to innovate and find new solutions to environmental problems. Go check out the agenda. If you agree with it, you can endorse the program at www.freedom21agenda.org.

Posted on 11/15/07 04:26 PM by Alex Adrianson

Write About Free Markets, Win Some Money

Students interested in writing about free markets can win up to $2,500 by entering the Association of Private Enterprise Education’s essay contest. It’s open to all full-time students 25 years old or under. Contestants can choose from three topics:

  • What Causes Prosperity?
  • What Is the Role of Ethical Behavior in a Free Market?
  • Can Markets Protect the Environment?

The author of the winning essay receives $2,500; the second prize is $2,000; and the third is $1,500. Up to ten others can receive honorable mentions of $250 each. Check the contest Web site for examples of previous winners and instructions and background on writing the essays.

The deadline is December 1, 2007. Winners of the contest, which is sponsored by the John Templeton Foundation, will be announced February 15, 2008.

Posted on 11/13/07 06:40 PM by Alex Adrianson

This Week on the Hill – November 13, 2007

Posted on 11/13/07 06:09 PM by Alex Adrianson

The Coming Week – Monday, November 12, 2007

Monday: Learn the rest of the story about the civil rights movement. See the documentary Emancipation Revelation Revolution at Howard University, 6:45 p.m. in the College of Medicine Auditorium, 520 W. Street, N.W., Washington, DC, Building No. 45. RSVP to kellyalexander43@gmail.com.

Monday: Find out if private contractors are helping or hurting our troops. America’s Future Foundation hosts a roundtable that will look at the use of private companies in Iraq and Afghanistan.

Tuesday: Discover why economic liberty is no less precious than other rights. The Center for the American Experiment and the Institute for Justice, Minnesota Chapter host William H. Chip Mellor.

Tuesday: Assess the promise of using mega-prizes to find solutions to public policy problems. Peter Diamandis delivers the Pioneer Institute’s Lovett C. Peters Lecture.

Wednesday: Take another look at the written opinions of Justice Clarence Thomas. The Heritage Foundation hosts law professor and author Henry Mark Holzer.

Wednesday: Get an update on state tax issues at the Tax Foundation’s State Tax Working Group. E-mail barr@taxfoundation.org for call-in instructions.

Wednesday: Explore the nexus between monetary regimes and freedom at the Cato Institute’s 25th Annual Monetary Conference.

Wednesday: Honor Richard Mellon Scaife at the Commonwealth Foundation’s 2007 Speaker Franklin Awards Dinner, featuring John Stossel.

Wednesday – Thursday: Receive grassroots training and attend issues briefings with Dick Armey and Steve Forbes at the FreedomWorks Liberty Summit.

Wednesday or Thursday: Catch the Wichita (Wednesday) or Kansas City (Thursday) premieres of the Acton Institute’s The Call of the Entrepreneur.

Thursday: Celebrate the Alabama Policy Institute’s 18th year by having dinner with Jeb Bush.

Thursday: See National Taxpayer Advocate Nina Olson, Bernard Shapiro or PricewaterhouseCoopers, and Mark McConaghy of PricewaterhouseCoopers receive the Tax Foundation’s 2007 Distinguished Service Award at the Tax Foundation’s 70th Annual Dinner.

Thursday: Hear Philip Zelikow, former director of 9/11 Commission discuss the future of the war on terrorism at the Foreign Policy Research Institute’s annual dinner.

Thursday: Find out whether the rating agencies are to blame for the subprime lending turmoil. The American Enterprise Institute hosts a panel assessing the regulatory treatment of rating agencies.

Friday: Take a course in Conservatism 101: Past, Present, and Future at The Harbor League.

Posted on 11/09/07 01:33 PM by Alex Adrianson

Heritage on Video

Heritage in Focus: The mainstream media likes to focus on bad economic news. … The Water Resources Development Act is a vehicle for pork. … Pervez Musharraf is alienating allies in the fight against Islamic extremism.

At Heritage: The American Revolution was more than just a war: It was a changing of hearts and minds. … Ronald Reagan and Margaret Thatcher were friends as well as political allies. … Men are not matter. … The United Kingdom, like the United States, has too many laws making too many things criminal. … William P. Clark helped Ronald Reagan change history. … President George W. Bush says we need to remember we are at war.

Posted on 11/09/07 01:30 PM by Alex Adrianson

Sarkozy Thanks America for France’s Freedom

An excerpt from the speech of Nicholas Sarkozy, President of France, before the United States Congress, November 7, 2007:

The men and women of my generation heard their grandparents talk about how in 1917, America saved France at a time when it had reached the final limits of its strength, which it had exhausted in the most absurd and bloodiest of wars.

The men and women of my generation heard their parents talk about how in 1944, America returned to free Europe from the horrifying tyranny that threatened to enslave it.

Fathers took their sons to see the vast cemeteries where, under thousands of white crosses so far from home, thousands of young American soldiers lay who had fallen not to defend their own freedom but the freedom of all others, not to defend their own families, their own homeland, but to defend humanity as a whole.

Fathers took their sons to the beaches where the young men of America had so heroically landed. They read them the admirable letters of farewell that those 20-year-old soldiers had written to their families before the battle to tell them: “We don’t consider ourselves heroes. We want this war to be over. But however much dread we may feel, you can count on us.” Before they landed, Eisenhower told them: “The eyes of the world are upon you. The hopes and prayers of liberty-loving people everywhere march with you.”

And as they listened to their fathers, watched movies, read history books and the letters of soldiers who died on the beaches of Normandy and Provence, as they visited the cemeteries where the star-spangled banner flies, the children of my generation understood that these young Americans, 20 years old, were true heroes to whom they owed the fact that they were free people and not slaves. France will never forget the sacrifice of your children.

To those 20-year-old heroes who gave us everything, to the families of those who never returned, to the children who mourned fathers they barely got a chance to know, I want to express France’s eternal gratitude.

Posted on 11/09/07 12:35 PM by Alex Adrianson

Trade Adjustment Assistance: Not a Bargain

The post-World War II grand bargain on trade has broken down, but Congress doesn’t seem to realize it, says Sallie James in a new brief for the Cato Institute. The grand bargain had been that while consumers benefit from the lower prices and better products brought by lowering trade barriers, some of those gains are redistributed via taxpayer-funded assistance to workers who lose their jobs as a result of international competition. Trade adjustment assistance had been the side payment needed to get organized labor to support free trade deals.

These days, however, organized labor shows no interest in new trade agreements—and opposes some already negotiated—but still wants the side payments. Nine separate proposals have been introduced in Congress that would in one way or another expand the Trade Adjustment Assistance program. TAA, says James, has simply legitimated the idea that free trade creates a special class of victims deserving of compensation. Thus, the grand bargain that many free traders had been willing to support—more government taxing and spending in exchange for less government interference with trade—now seems more of a Faustian bargain.

James says:

Free trade advocates clearly must improve their efforts to promote the benefits of trade and the costs of protectionism, as an antidote to the flawed commentary gaining ground in the public sphere. We should make clear that freeing trade is undoing the damage done by prior policy choices.

See Maladjusted: The Misguided Policy of Trade Adjustment Assistance by Sallie James, Cato Institute, November 8, 2007.

Posted on 11/09/07 11:12 AM by Alex Adrianson

Farming for Dollars

Posted on 11/08/07 02:17 PM by Alex Adrianson

Public Education in New Mexico: More Spending, Less Education

More spending, by itself, doesn’t necessarily improve the performance of a state’s education system. The missing ingredient, according to a new study by New Mexico’s Rio Grande Foundation, is local control of education spending. Local control of resources, says study author Harry Messenheimer, makes school districts more responsive to parents. “The threat of outmigration helps discipline school administrators to provide what consumers want. After all, no administrator likes to see an exodus from her district.”

The ability of families to relocate to a preferred school district, in other words, produces competition among school districts—even if it isn’t the fully robust competition envisioned by Milton Friedman when he proposed school vouchers for every child in America. But that can only work to the degree that school districts are able to set their own spending priorities, free from strings attached by the state.

Messenheimer performed a regression analysis which found that the percentage of education spending controlled by local school districts is a statistically significant independent variable that helps explain a state’s education performance. More local control tends to produce better results as measured by student scores on the National Assessment of Education Progress tests.

According to Messenheimer, the results of his analysis help explain “why New Mexico has been unable to improve its performance despite the significant increase in resources …”

As New Mexico has been adding resources, its “reforms” have been reducing education freedom. Each so called “reform” seems to add more regulation, more certification, and more centralization. These policies are exactly the opposite of what would make the education system more responsive to parents and thereby improve performance.

See The Way to Education Success in New Mexico: Breaking Free from Failed “Reforms” by Harry Messenheimer, Rio Grande Foundation.

Posted on 11/08/07 11:42 AM by Alex Adrianson

Medicare and Medicaid Reward Bad Hygiene

Roger Bate of the American Enterprise Institute writes:

According to the Centers for Disease Control, up to 2 million Americans contract HAIs [health care associated infections] every year, resulting in approximately 88,000 deaths and $4.5 billion in extra costs. While medical technology is improving and new drugs are being developed, HAI incidence, especially of deadly superbugs such as MRSA and Clostridium difficile, is increasing. In 1974, MRSA infections accounted for 2% of the total number of staph infections. By 2004, it was up to 64%, most contracted in or compounded by a hospital stay. In New York's Monroe County, health care associated MRSA increased by over 37% in the last year alone.

The problem could be arrested, says Bate, if hospitals simply followed better cleaning practices. Unfortunately, Medicare and Medicaid’s reimbursement system gives hospitals no incentive to worry about unhygienic conditions: “… higher payments are paid to hospitals when patients develop clinically significant complications—including HAIs—after admission.”

This has created a situation in which “hospitals that improved patient safety and ameliorated problems such as nosocomial [hospital acquired] infections saw their Medicare revenues—and sometimes their profits—reduced,” an associate professor of health economics and policy at Harvard University, Dr. Meredith Rosenthal, reported in the New England Journal of Medicine in October.

But, says Bate, if hospitals don’t want “superbugs” to become the next asbestos—a source of litigation nightmares—they need to clean up.

Posted on 11/07/07 03:42 PM by Alex Adrianson

Disclosure Gone Wrong

The First Amendment says “Congress shall make no law … abridging the freedom of speech …” And it has pretty well been settled that the injunction applies to state legislatures, too. Nevertheless, many states regulate the political activity of ordinary citizens by requiring the disclosure of names, contributions, and expenses of those who work to defeat or to win a ballot initiative. A new study suggests that the burden of complying with those disclosure laws is so great as to have a chilling effect on political speech.

The Institute for Justice conducted an experiment in which 255 people were presented with actual disclosure forms from California, Colorado, or Missouri. They were given a simple scenario and asked to complete the forms. Not one person in the experiment could complete all the form correctly. In fact, no one completed more than 80 percent of the disclosure tasks correctly, and the average subject got just 41 percent right.

Study author Jeffrey Milyo says it is so easy for citizens to unwittingly violate disclosure laws that the laws are effectively a legal trap that can be used to harass citizens for doing nothing more than engaging in political speecha right guaranteed them by the U.S. Constitution.

For more detail, see Campaign Finance Red Tape: Strangling Free Speech & Political Debate, by Jeffrey Milyo, Institute for Justice, October 2007.

Posted on 11/06/07 06:21 PM by Alex Adrianson

Which Members Get Farm Subsidies?

USA Today reports that a total of $6.2 million in farm subsidies has been distributed to members of Congress or their families in the period 1995-2005. Eight senators and four representatives have either received subsidies directly or have family members who have received them during that period.

Sometime this week, the eight senators will be called upon to cast votes on a new farm bill that very likely will expand farm programs. According to Senate rules, that’s not a conflict of interest. According to Heritage’s Ron Utt, it should be:

While the best solution to these conflicts of interest would be to abolish the farm subsidy program, a backup plan would be to apply strict conflict-of-inter­est principles to the program by requiring that Mem­bers of Congress who benefit from it financially either recuse themselves from voting on any farm legislation or forgo any farm subsidies for which they and their families and relatives would be eligible.

(See Federal Farm Subsidy Programs: How to Discourage Congressional Conflicts of Interest, by Ron Utt, The Heritage Foundation, June 27, 2007.)

The eight senators who received farm subsidies in 1995-2005 are Max Baucus (D-Mont.), Sam Brownback (R-Kan.), Charles Grassley (R-Iowa), Blanch Lincoln (D-Ark.), Richard Lugar (R-Ind.), Ken Salazar (D-Colo.), Gordon Smith (R-Ore.), and Jon Tester (D-Mont.). Sen. Grassley tops the list of recipients in the Senate; he and his son, who has a separate farm, received $878,854.

Sen. Lugar, who made the list with $126,555 received by a family partnership, has long been a champion of significant reductions and reforms in farm programs. This year he has proposed an alternative bill (the Farm, Ranch, Equity, Stewardship and Health (FRESH) Act of 2007, S. 2228) that would replace most farm subsidies with a more limited system of insurance against loss.

The four members of the House who received farm subsidies in 1995-2005 are Marion Berry (D-Ark.), Dennis Hastert (R-Ill.), John Salazar (D-Colo.), and Stephanie Herseth Sandlin (D-S.D.). Rep. Berry tops the list of House recipients, with $2,357,094.

Posted on 11/06/07 11:19 AM by Alex Adrianson

Simpleton's Guide: Law of the Sea Treaty

Posted on 11/05/07 04:10 PM by Alex Adrianson

Senate Wants More Bloat in Farm Programs

There’s plenty wrong with U.S. farm programs, but unfortunately the U.S. Senate doesn’t seem to be interested in fixing them.

For one thing, farm programs ding taxpayers to the tune of $25 billion per year in order to give subsidies to wealthy people. The average annual income for farm households is $81,000, and the median net worth is $460,000. Most subsidies go to corporate farms, which have an average annual income of nearly $200,000 and a net worth of almost $2 million.

And in the bargain, consumers don’t even get much benefit from lower food prices. Subsidies encourage overproduction which can lower prices, but other elements of farm programs have a countervailing effect. Conservation programs limit production and tariffs raise the cost of imports. When you take those things into account, the net impact on consumers is $12 billion per year in higher food prices, according to calculations of the Organisation for Economic Cooperation and Development.

But subsidies do lower the prices of some foods—the ones that aren’t good for us. Lots of food activists want to put the government in charge of supervising the diets of adults. A policy more consistent with individual liberty would be simply to stop making corn and soy (from which fats and sugars are derived) cheaper relative to fruits and vegetables, which are unsubsidized.  

Soon, the Senate will take up the Food and Energy Security Act, which should be an opportunity to rein in farm programs. Instead, the bill takes them in the opposite direction. As Brian Riedl details in a new paper for The Heritage Foundation, the Food and Energy Security Act

  • raises target prices for crops which causes subsidies to kick in sooner;
  • creates a new permanent disaster aid program which gives new subsidies on top of those already in place through the crop insurance program;  
  • gives most of the subsidies to large corporate farms; and
  • perpetuates an outrageous loophole that allows farmers to sell their crops at a high price, but collect subsidies for selling at a lower price.

Here is Riedl’s explanation for that last bullet point:

farmers are not compensated for the actual price at which they sell their crops. Instead, farmers can select the market price on any day of the year and, even if they do not sell their crops that day at that market price, receive a subsidy based on it. So farmers can sell their crops at high prices and still be subsidized as if they had sold them at low prices.

The one good thing the bill does, says Riedl, is offer a more rational system for calculating subisidies. The bill gives farmers the option of having subsidies based on per-acre revenue rather than just prices. That makes more sense because low prices are often caused by high yields. If yields are high, then farmer income might be just fine without subsidies. Still, that system is voluntary; and it doesn’t outweigh the bad parts.

Posted on 11/05/07 03:05 PM by Alex Adrianson

This Week on the Hill – Monday, November 5, 2007

Posted on 11/05/07 02:09 PM by Alex Adrianson

The Coming Week – Monday, November 5, 2007

Tuesday: Explore the sources of political violence by attending the American Enterprise Institute’s two-day conference honoring the work of Robert Conquest. Panelists discuss repression in the Soviet Union, post-communist Russia, China, Cuba, and postcolonial Africa; the role of intellectuals in interpreting and legitimizing political violence and repression; and comparisons of communist and contemporary Islamic political violence.

Tuesday: Celebrate freedom at the Fourth Annual Atlas Freedom Dinner. Francisco Flores, former President of El Salvador, delivers the keynote address.

Wednesday: Find out why the surge is working. The Edmond A. Walsh School of Foreign Service hosts a lecture by Frederick Kagan of the American Enterprise Institute.

Wednesday: Learn about the personal relationship behind the ideological alliance between Ronald Reagan and Margaret Thatcher. At The Heritage Foundation, Nicholas Wapshott discusses his new book Ronald Reagan and Margaret Thatcher: A Political Marriage.

Thursday: Plumb the depths of the social pathologies that plague England. Theodore Dalrymple, hosted by the Ethics an Public Policy Center and the Independent Women’s Forum, considers the possibility that England may be on its deathbed and what such a death would mean for America.

Friday: Examine the link between economic freedom and human well-being. The Cato Institute hosts a forum featuring James Gwartney, co-author of Economic Freedom of the World: 2007 Annual Report and Simeon Djankov, lead author of Doing Business 2008.

Saturday: Discover whether Americans are sufficiently happy. The Economist hosts a debate featuring Will Wilkinson, Tyler Cowen, Betsey Stevenson, and Jeffrey D. Sachs.

Posted on 11/02/07 11:20 AM by Alex Adrianson

Heritage on Video

Heritage in Focus: America and its allies need missile defense.

At Heritage: Col. James McGinley is an American patriot who has played an important role in helping rebuild Iraq. … The idea that an “Israel Lobby” unduly influences American foreign policy is a lie. … Has China become a diplomatic “crutch” for United States interests in East Asia?

Posted on 11/02/07 11:17 AM by Alex Adrianson

Huber: New Drugs Will Kill Socialized Medicine

Peter Huber’s Cherry Garcia and the End of Socialized Medicine in the Fall issue of City Journal is a must read. He makes the case that the war on germs has been largely won and pharmacology has moved on to the problem of tuning human chemistry—fighting what Huber calls “glut and gene” diseases. That transformation, he says, will expose more than ever before differences in individual risk and undermine health insurance as we know it.

… what will insurers do with the pill that leaves the kick in a pack of Marlboros but magically neutralizes the poison? Will Aetna and the surgeon general both celebrate this miracle drug, congratulate Pfizer for racking up $40 billion in new sales in just one year, gracefully accept their respective shares of the bill, and watch calmly as smoking rates ramp back up? Will Congress declare that every smoker needs this drug, every smoker must get it, and Pfizer’s price gouging must end at once? Or will some heartless bookkeeper in Hartford or Washington dare to suggest that enough is enough, smoking is foolish, and the smoker can jolly well pay for the pill himself—or, failing that, for his own cancer, emphysema, and heart disease?

Lipitor for the Marlboro Man will take a while, but molecular medicine already raises questions like these every day, and they will keep piling up until they can no longer be concealed in the fine print of insurance policies or federal regulations. Common as they still are, insurance systems that pool health risks indiscriminately are vestiges of the past. They can’t survive what lies ahead.

Posted on 11/01/07 04:52 PM by Alex Adrianson

Costly Regulations

Earlier this week I noted John Berlau’s argument that overzealous regulatory protection of the habitat of gnatcatchers contributed significantly to the recent wave of fires in Southern California—fires that destroyed the habitats of gnatcatchers (and that of people, too!).

The San Diego Institute has just released an estimate of the damage done by the fires in San Diego County: at least $2 billion.

Question: How much gnatcatcher sanctuary could taxpayers get for $2 billion?

Posted on 11/01/07 02:23 PM by Alex Adrianson

A New Case for Taxpayers Bill of Rights

At National Review Online, Cato’s Michael J. New notes that Colorado taxpayers could have saved themselves an average of $910 each in the past two years—if only voters had not unwisely ditched the revenue limits from the state’s Taxpayers Bill of Rights. Under those limits, the state would have had to send $800 million in excess revenue back to the taxpayers.

The limits were suspended in order to help the government deal with a fiscal crunch. Now that things are good for the economy, however, the government is just spending more money. New:

However, the missing tax rebates, may give fiscal conservatives a better strategy. Government grows largely because many people enjoy the benefits of various programs, but remain blissfully unaware of the costs that they and other taxpayers are forced to bear. TABOR was successful at limiting government because the annual tax rebates brought those tradeoffs clearly into focus. Indeed, the enduring strength of TABOR is that its rebate provisions effectively turn every spending increase into a tax hike.

Posted on 11/01/07 01:55 PM by Alex Adrianson

The Ultimate Resource

Don’t forget to tune in Friday to what will probably be the best thing PBS broadcasts this year (sorry “This Old House”!).

Check for participating stations.

Posted on 11/01/07 12:17 PM by Alex Adrianson

Word of Mouth Propels Pro-Life Movie

Can a film with an uplifting, pro-life message become a box office hit? Bella has ridden a  very strong word-of-mouth marketing campaign to an impressive first week. Released to only 165 theaters, the film still grossed $1.324 million, for an average of $8,024 per screen. That per-screen average beat every film except the gore-fest Saw IV. Bella also sold out the two highest grossing theaters in the country (both in Manhattan) and no other film sold out as many screens as Bella did in those theaters. That means Bella beat the biggest films head-to-head in the biggest theater in the biggest market in the world.

Still, the producers believe the film needs a strong showing this weekend in order to convince theater owners that the film has momentum so that they will give the film more screens. If you want to send a message that Hollywood needs to make movies with a positive message, and if you want other people to be able to see that kind of movie, this weekend is the time to go see Bella.

See the trailer. Find a theater. See also www.HowToHelpBella.com

Posted on 11/01/07 11:15 AM by Alex Adrianson

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