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InsiderOnline Blog: November 2012

To Do: Help Improve the Nation’s Military Leadership

• If you are a military or naval officer, consider applying for the John Jay Institute’s Saratoga Fellows Program. “The program,” says the Institute, “is designed to prepare officers with the formation necessary to be principled leaders in the Armed Forces of the United States. It aims to address the central need for military leaders to understand our civilization’s intellectual and moral tradition and to thoughtfully engage in public discourse with a civil, reasoned and principled manner that underlies the officer’s calling to public service and the profession of arms.” The program is free to attendees, who are selected on merit. The deadline for applying for the summer term is January 11.

• Learn about the future of Israel’s Iron Dome missile defense system. On December 5, at 1 p.m., The Heritage Foundation will host a panel discussion examining the role of U.S.-Israel cooperation on missile defense.

• Celebrate excellence in teaching. The John William Pope Center’s Spirit of Inquiry Awards Dinner will honor “North Carolina professors whose courses embody a spirit of inquiry within an academic discipline.” The dinner begins at 6 p.m., December 6, 2012 at the Capital City Club in Raleigh, N.C.

• Pennsylvania teachers, check out the Commonwealth Foundation’s new website, Free to Teach. It’s a resource and platform for teachers who want an seeking an alternative to teachers union’s agenda of forced unionization and public monopolization.

• Learn how to do new media. Apply for a spot in PolicyMic’s Digital Media Bootcamp. The program let’s you do the work on your own time.

• Wonder how politicians use graphics to make their case? Think tanks do it all the time. Now there’s an easy way to see how graphics influence the political debate. Floor Charts is a new website that archives all the CSPN shots of graphics used on the Senate floor. Check it out.

• Check out these various video offerings: Dorian Electra explains with song how easy money policies dis-coordinates the economy; Anne Applebaum’s Bradley Lecture at the American Enterprise Institute recounts Stalin’s crushing of Eastern Europe; and a panel at The Heritage Foundation explores the need for wind power to compete without subsidies.

(And check our Conservative Calendar for more things to do!)

Posted on 11/30/12 05:03 PM by Alex Adrianson

Yes, There Are Ways to Cut Spending (and Avoid Tax Increases)

The Republican Study Committee’s proposed budget, writes Diana Furchtgott-Roth, is just one of many sources of ideas:

The proposed [Republican Study Committee] budget sets discretionary spending at $931 billion in fiscal year 2013, slightly less than the amount in the fiscal 2008 budget, $933 billion.

To get there, the RSC budget eliminates funding for several programs whose functions do not have to be provided by government. Gone would be the Corporation for Public Broadcasting — everyone knows we have enough cable, broadcast, and internet offerings without the government providing more — for a savings of $4 billion over 10 years. Gone would be the National Endowment for the Arts ($2 billion saved), because arts can be funded by the private sector and state and local governments. Under the hatchet would be the Economic Development Administration and the Legal Services Corporation ($4 billion saved), whose functions could be provided by the states. The National Labor Relations Board would be merged into the Department of Justice.

The RSC budget contains lists of agriculture subsidies that are ripe for elimination, adding up to $55 billion over 10 years. It proposes privatizing Fannie Mae and Freddie Mac (savings: $43 billion), and ends the concept of too big to fail (savings: $32 billion). It suggests that federal employees’ pension contributions be raised to levels comparable with the private sector. It suggests ending the Presidential Election Campaign Fund (savings: $371 million).

Most important, the Committee tackles entitlement programs. Costs of Social Security and Medicare increase with people’s life expectancies and changes have to be made to keep the programs solvent. For those 55 and younger, the RSC proposes to gradually raise the Social Security retirement age to 70 years and the Medicare eligibility age to 67.

Both the House budget and the RSC suggests transforming Medicare beginning in 2023 into a premium support program, with competing plans, like the Federal Employees Health Benefits Program. Seniors would choose from government-approved insurance programs and richer seniors would pay more for coverage. [MarketWatch, November 29]

Posted on 11/30/12 02:29 PM by Alex Adrianson

Some Fixes Are Not That Hard

You might not know it from all the political theater going on this week, but there are actually six ideas for entitlement reform that enjoy bipartisan support and could probably get enacted if President Obama decided to get behind them. J.D. Foster and Alison Fraser review those ideas in a new paper for The Heritage Foundation. They are: (1) Raise the Social Security eligibility age to match increases in longevity; (2) use a more accurate measure of inflation to reduce Social Security’s cost-of-living adjustment; (3) raise the Medicare eligibility age to put it in line with that of Social Security; (4) reduce the Medicare subsidy for upper-income beneficiaries; (5) phase out Social Security benefits for upper-income retirees; and (6) consolidate Medicare’s elements and collect a single higher premium.

“These proposals,” explain Foster and Fraser, “will not resolve either program’s key structural flaws—they constitute a start of the reform journey, not the conclusion—but they would be a powerful start that would markedly alter the nation’s fiscal trajectory.” [The Heritage Foundation, November 30]

Posted on 11/30/12 02:08 PM by Alex Adrianson

How the Economy Works, in One Bureaucrat’s Opinion

A news report from Serbia: “Director Serbia Posta said no worker will be fired, because the company’s problem is not too many workers but not enough business.” [Politika Online, November 26; h/t: economics professor Svetozar Pejovich.]

That’s pretty much been the philosophy of the past 80 years: If the economy isn’t working, don’t point the finger at the politicians, or the labor unions, or the businesses. Blame the consumer for not buying enough stuff.

Posted on 11/30/12 12:14 PM by Alex Adrianson

At Least the New York Times Has Good Lawyers Who Can Correct the Mendacity of Its Writers

Floyd Abrams, who defended the New York Times in the Pentagon Papers case, corrects his former client in a letter to the editor:

Justice Alito, Citizens United and the Press” (editorial, Nov. 20), criticizing Justice Samuel A. Alito Jr.’s defense of the Supreme Court’s Citizens United ruling, misapprehends the nature of The Times’s own great victories in cases such as the Pentagon Papers and New York Times v. Sullivan.

You state correctly that in neither case did the court make anything of the fact that The Times is a corporation. But that is the point. In those cases, as in Citizens United, political speech was held protected regardless of who was speaking or what its corporate status was. As Justice Anthony M. Kennedy explained in Citizens United, “the First Amendment protects speech and speaker, and the ideas that flow from each.”

The law at issue in Citizens United permitted The Times to endorse candidates while making it a felony for nonmedia corporations to do so. It made it a crime for a union to distribute your endorsement of President Obama for re-election to its members. It should come as no surprise that the same First Amendment that was held to shield the press in landmark cases of the past now shields such speech as well. [New York Times, November 27; h/t Overlawyered, Novermber 28]

Posted on 11/30/12 11:20 AM by Alex Adrianson

Public Debt = Expectations That Cannot Be Met

In case you thought the national debt is mostly just “money we owe ourselves,” and therefore not really a problem, Arnold Kling is here to sober you up:

Another term that economists have coined in the context of government debt is “sudden stop.” What that means is that when all other sources of lending have dried up and the public's tolerance for hyperinflation has been exhausted, the government must suddenly balance its budget. That is how government debt crises typically end. At that point, the irreconcilable expectations of Lenders and Spenders are resolved, one way or another.

The political conflict created by the debt in the United States is as large as it is in Greece. I believe that Americans will not be as prone to violent demonstrations, but the underlying anger will be there nonetheless.

The burden of the debt is that we create an ever-deeper conflict of interest between Lenders and Spenders. Yes, if you think of Lenders and Spenders collectively, you can say that “we owe the debt to ourselves.” But that is a dangerously vacuous way of looking at it. Large government debt is a recipe for a bitter political stew. [The American, November 20]

Posted on 11/29/12 07:26 PM by Alex Adrianson

Christmas Wins! Christmas Wins!

Here’s a story about the war on Christmas that has a happy ending: Earlier this month, administrators at Western Piedmont Community College told one of its student groups that it could market the group’s holiday tree sale but not its Christmas tree sale. “We cannot market your trees in association solely with a Christian event,” said the school’s Community Relations Direct, explaining why advertising copy for the group’s sale had been changed to say “holiday tree” instead of “Christmas tree.”

On behalf of the group, BEST Society, the Alliance Defending Freedom fired off a letter to school officials explaining: “WPCC’s removal of all references to Christmas in BEST’s advertisements because of the religious message conveyed in the advertisements is blatant viewpoint discrimination in violation of the First Amendment.”

On Tuesday, possibly worried about the threat of legal action, Western Piedmont Community College decided to reverse its censorship and put the word Christmas back into the ad copy. Whatever the school’s motive, it admitted an error and apologized to the students. So, two cheers for Western Piedmont Community College! [Alliance Defending Freedom, November 28]

Posted on 11/29/12 06:43 PM by Alex Adrianson

Now Can We Say the Stimulus Failed?

James Pethokoukis:

1. In August of 2009, Team Obama predicted GDP would rise 4.3% in 2011, followed by 4.3% growth in 2012 (and 4.3% in 2013, too).

2. In its 2010 forecast, Team Obama predicted GDP would rise 3.5% in 2012, followed by 4.4% growth in 2013, 4.3% in 2014.

3. In its 2011 forecast, Team Obama predicted GDP would rise 3.1% in 2011, 4.0% in 2012, 4.5% in 2013, and 4.2% in 2014.

4. In its most recent forecast, Team Obama predicted GDP would rise 3.0% this year and next, and then 4.0% after that.

Instead, GDP grew 2.4% in 2010, and 1.8% last year. So far this year, quarterly growth has been 2.0%, 1.3%, and 2.7% — with maybe 1.5% in the current quarter. Instead of quarter after quarter of 4% growth, we’ve had just two: The final quarters of 2009 and 2011. Other than those, we’ve haven’t had a single quarter with growth higher than this quarter’s 2.7%. It’s why we still have massive employment and output gaps. [AEIdeas, November 29]

Posted on 11/29/12 12:46 PM by Alex Adrianson

Birthday Quotes

Henry Hazlitt, born 118 years ago this week: “[E]ither immediately or ultimately every dollar of government spending must be raised through a dollar of taxation. Once we look at the matter in this way, the supposed miracles of government spending will appear in another light.” [Economics in One Lesson (1946)]

Winston Churchill, born 138 years ago this week: “An appeaser is one who feeds a crocodile—hoping it will eat him last.”

Posted on 11/29/12 12:44 PM by Alex Adrianson

ObamaCare Doesn’t Seem to Be Winning Hearts and Minds

Quite the opposite, in fact.

For the first time in Gallup trends since 2000, a majority of Americans say it is not the federal government’s responsibility to make sure all Americans have healthcare coverage. Prior to 2009, a majority always felt the government should ensure healthcare coverage for all, though Americans’ views have become more divided in recent years.

[Gallup, November 28]

Posted on 11/28/12 03:34 PM by Alex Adrianson

Watch Out for the Welfare Cliffs!

The disincentives to work created by government transfer programs can be truly enormous. The chart below, created by Gary Alexander, Pennsylvania Secretary of Public Welfare, shows the relationship between wages and disposable income for a single mother of two living in Pennsylvania.

Notice how, beginning at about $30,000, this woman’s disposable income drops in several steps as she moves up the income scale and becomes ineligible for various benefits. According to this chart, this women is better off earning $29,000 than earning $69,000. The welfare system actually rewards her for turning down a $69,000 per year job offer in order to keep her current job. Those who are concerned about declining social mobility should focus on this problem.

[Chart from Gary Alexander’s presentation at the American Enterprise Institute, July 2012; h/t Zero Hedge, November 27]

And by the way, this is the welfare state that the President wants to keep afloat with higher taxes.

Posted on 11/28/12 02:27 PM by Alex Adrianson

There Are No Tax Solutions to Our Fiscal Problem

Brett Nelson:

According to the most recent Medicare Trustees’ annual report, in April, [Chris] Cox and [Bill] Archer write, “the [current] value of the unfunded liability of Medicare was $42.8 trillion. The comparable balance sheet liability for Social Security is $20.5 trillion.” In short, that means: “Borrowing on this scale…could bankrupt not only the programs themselves but the entire federal government.”

Cox and Archer aptly put the numbers in the context of the current philosophical standoff on tax policy: When the amounts that theoretically must be set aside every year to cover future payouts to entitlement programs are tallied, it becomes clear that “to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually.”

Where to find $8 trillion? Taxes alone won’t get us there—not even close.

Consider, the authors continue: “All individuals filing tax returns in America and earning more than $66,193 per year have a total adjusted gross income of $5.1 trillion. In 2006, when corporate taxable income peaked before the recession, all corporations in the U.S. had total income for tax purposes of $1.6 trillion.”

Translation: If you confiscate all the earnings of people who make above $66,000 a year, plus all of the corporate taxable income at the height of an economic bubble, the U.S. is still shy $1.3 trillion per year to fund the growth of its future obligations. [Forbes, November 27]

Posted on 11/27/12 07:07 PM by Alex Adrianson

If Warren Buffett Thinks People Like Him Should Pay More in Taxes then What Is Stopping Him?

Greg Mankiw points out that super investor Buffett, calling yet again for higher taxes on high-income earners (this time in the Sunday New York Times), is a master of tax avoidance:

1. His company Berkshire Hathaway never pays a dividend but instead retains all earnings.  So the return on this investment is entirely in the form of capital gains.  By not paying dividends, he saves his investors (including himself) from having to immediately pay income tax on this income.

2. Mr Buffett is a long-term investor, so he rarely sells and realizes a capital gain.  His unrealized capital gains are untaxed.

3. He is giving away much of his wealth to charity.  He gets a deduction at the full market value of the stock he donates, most of which is unrealized (and therefore untaxed) capital gains.

4. When he dies, his heirs will get a stepped-up basis.  The income tax will never collect any revenue from the substantial unrealized capital gains he has been accumulating. [Greg Mankiw’s Blog, November 26]

Posted on 11/27/12 06:07 PM by Alex Adrianson

In Virginia, Guns Are Up and Crime Is Down

Gun-related violent crime in Virginia has dropped steadily over the past six years as the sale of firearms has soared to a new record, according to an analysis of state crime data with state records of gun sales.

The total number of firearms purchased in Virginia increased 73 percent from 2006 to 2011. When state population increases are factored in, gun purchases per 100,000 Virginians rose 63 percent.

But the total number of gun-related violent crimes fell 24 percent over that period, and when adjusted for population, gun-related offenses dropped more than 27 percent, from 79 crimes per 100,000 in 2006 to 57 crimes in 2011.

The numbers appear to contradict a long-running popular narrative that more guns cause more violent crime, said Virginia Commonwealth University professor Thomas R. Baker, who compared Virginia crime data for those years with gun-dealer sales estimates obtained by the Richmond Times-Dispatch. [Richmond Times Dispatch, November 23]

Our guess: More guns in the hands of law abiding citizens make criminals think twice before committing a crime.

Posted on 11/27/12 05:03 PM by Alex Adrianson

To Do: Revive Conservatism by Talking About Civil Society

• Find out how rediscovering civil society can help revive conservatism. The Hudson Institute will host a mini-conference on the topic on November 27 at its Washington, D.C., headquarters. The event begins at 11:30 a.m.

• Hear author Anne Applebaum talk about her new book Iron Curtain: The Crushing of Eastern Europe, 1945-1956. The Heritage Foundation will host Applebaum at 12:30 p.m. on November 28.

• Students, get your applications in for a Koch Internship. The deadline for the Spring is December 10.

• Learn why the minimum wage hurts the least skilled workers. The Foundation for Economic Education explains it well in a new video.  

• If you’re looking for a job, remember to check out the Leadership Institute’s job fair in the Hart Senate Office Building on November 28 and 29.

(And check our Conservative Calendar for more things to do!)

Posted on 11/21/12 11:44 AM by Alex Adrianson

Following Europe's So-Called “Balanced Approach” Is Folly

Addressing the “fiscal cliff” by increasing taxes and failing to cut government spending is exactly the wrong policy. That’s what Europe has been doing for the past four years, and it hasn’t worked, observes Matthew Melchiorre:

Spending cuts have been weak. Today, not a single Euro Zone government is spending less as a percentage of GDP than it did in 2007, according to Eurostat data.

Tax increases, on the other hand, have been rampant. The average cyclically adjusted total tax burden among Euro Zone countries increased by about 5% from 2007 to 2010, according to European Commission data. European politicians continue to reach deeper into their citizens’ pockets. Most recently, the French parliament approved Socialist President Francois Hollande’s proposal for sky-high 75% marginal tax rates on incomes greater than €1 million.

This misguided focus on raising taxes instead of cutting a morass of unaffordable spending has led to prolonged recession. The International Monetary Fund projects that total Euro Zone output in 2013 will remain below potential by 2.7% — worsening from 2.4% this year. Unemployment will rise accordingly.

Grim as they are, these trends aren’t surprising. A 2012 study by Professor Alberto Alesina of Harvard University found that economies undergoing fiscal consolidation centered on spending cuts recovered to pre-austerity output within roughly one year, while economies faced with rising taxes didn’t recover for more than three years. Cutting government largesse also had an immediate boost on business confidence, while asking taxpayers to pony up for more spending caused confidence to plummet. [USA Today, November 13]

Posted on 11/21/12 11:10 AM by Alex Adrianson

Be Thankful

A thankful heart is not only the greatest virtue, but the parent of all the other virtues.
—Marcus Tullius Cicero

To fail to experience gratitude when walking through the corridors of the Metropolitan Museum, when listening to the music of Bach or Beethoven, when exercising our freedom to speak, or as happened to us three week ago, to give, or withhold, our assent, is to fail to recognize how much we have received from the great wellsprings of human talent and concern that gave us Shakespeare, Abraham Lincoln, Mark Twain, our parents, our friends. We need a rebirth of gratitude for those who have cared for us, living and, mostly, dead. The high moments of our way of life are their gifts to us. We must remember them in our thoughts and in our prayers; and in our deeds.
—William F. Buckley, Jr., remarks  at the Intecollegiate Studies Institute’s 35th Annual Dinner, November 29, 1988, reprinted in Let Us Talk of Many Things, 2000.

Posted on 11/21/12 10:39 AM by Alex Adrianson

Not Exculpatory

Here is CBS’s lede in the latest Benghazi  break:

CBS News has learned that the Office of the Director of National Intelligence (DNI) cut specific references to “al Qaeda” and “terrorism” from the unclassified talking points given to Ambassador Susan Rice on the Benghazi consulate attack – with the agreement of the CIA and FBI. The White House or State Department did not make those changes.

That makes it sound like neither the White House nor Ambassador Rice intended to mislead anybody in claiming that the Benghazi attack was not preplanned but merely grew out of a protest against an anti-Mohammed video. Were they just victims of bad editing? Nope. Here is paragraph five:

“The intelligence community assessed from the very beginning that what happened in Benghazi was a terrorist attack.” DNI spokesman Shawn Turner tells CBS News. That information was shared at a classified level – which Rice, as a member of President Obama’s cabinet, would have been privy to. [CBS News, November 20]

Posted on 11/20/12 07:53 PM by Alex Adrianson

Just Two Problems with the Carbon Tax

There are only two problems with supporting a revenue-neutral carbon tax as an alternative to regulating carbon emissions: The carbon tax will never be revenue-neutral; and it will never be an alternative to regulating carbon emissions. David Kreutzer:

The MIT professors who authored one of the studies purporting to show the benefits of a carbon tax must use a Newspeak version of “revenue neutral,” when they say “All of the carbon tax revenue, after assuring neutrality, is used for tax relief or social programs.” If it were truly a revenue neutral tax, there wouldn’t be any revenue left “after assuring neutrality.”

An anecdote is illustrative of the problem with revenue neutrality. The first person who sat next to me a the American Enterprises Institute’s program on the carbon tax, last week, told me her association’s industry has great plans for the carbon-tax revenue. There appeared to be over 150 people at the event. In all likelihood, many of them represent groups with similarly great plans for the revenue.

Revenue neutrality is out, but what about eliminating overly burdensome regulations? Some proponents of a carbon tax believe the tax properly prices the externalities that vex opponents of fossil fuels and, therefore, eliminates the need for regulation of carbon dioxide. Bolstered by this knowledge of economics, they expect any deal for the tax to include eliminating all or a significant part of these regulations.

If this logic did carry over, then cap and trade also would have eliminated the need for carbon regulation. Instead of reducing regulations, the cap and trade bills added them. For instance, the Waxman-Markey bill went on for nearly 700 pages before it even got to cap and trade. [National Journal, November 20]

Posted on 11/20/12 07:35 PM by Alex Adrianson

Is It Plausible that Federal Employees Are Underpaid by 35 Percent?

That’s what a new survey by the federal government claims, but it isn’t so, say Andrew Biggs and Jason Richwine. If federal employees were really underpaid that much, they point out, then many would quit their jobs to go work in the private sector. That’s not happening: “Data from the Bureau of Labor Statistics Job Openings and Labor Turnover survey show that, from 2001 to 2010, federal employees quit their jobs at less than half the rate of workers in large private-sector companies.

Biggs and Richwine also point out that the calculation from the “President’s Pay Agent,” exludes fringe benefits: “A Congressional Budget Office study published in January found that the federal retirement package was 2.7 times more generous than what is paid by large private-sector firms. Federal workers also receive more paid vacation and sick days.

Other reasons the federal calculation contradicts three decades of academic research:

[I]t compares pay for federal jobs to nonfederal positions at a similar “grade,” or level. Yet both the CBO and the GAO have documented “overgrading” in the federal workforce, meaning that federal jobs could be assigned higher grades on the General Salary Schedule than the pay agent assumes for their nonfederal equivalents. This can create the appearance of pay differences where none exist.

The pay agent also doesn’t consider the relative qualifications of federal employees. In a 2002 study, economist Melissa Famulari concluded: “Federal workers have significantly fewer years of education and experience than private sector workers in the same level of responsibility in an occupation.” [Washington Post, November 18]

Posted on 11/20/12 04:19 PM by Alex Adrianson

Why Not Try Federalism Before Secession?

Glenn Harlan Reynolds:

[I]n general, the causes of secession are pretty standard around the world: Too much power in the central government, too much resentment in the unhappy provinces. (Think Hunger Games).

So what’s a solution? Let the central government do the things that only central governments can do – national defense, regulation of trade to keep the provinces from engaging in economic warfare with one another, protection of basic civil rights – and then let the provinces go their own way in most other issues. Don’t like the way things are run where you are? Move to a province that’s more to your taste. Meanwhile, approaches that work in individual provinces can, after some experimentation, be adopted by the central government, thus lowering the risk of adopting untested policies at the national level. You get the benefits of secession without seceding.

Sound good? It should. It’s called federalism, and it’s the approach chosen by the United States when it adopted the Constitution in 1789. [USA Today, November 19]

Posted on 11/20/12 10:47 AM by Alex Adrianson

News Tilted to Obama at the Finish Line; Social Media More Balanced

These findings from the Pew Research Center’s Project for Excellence in Journalism will probably surprise few:

During this final week, from October 29 to November 5, positive stories about Obama (29%) outnumbered negative ones (19%) by 10 points. A week earlier, negative coverage of Obama had exceeded positive by 13 points. The final week of the campaign marked only the second time in which positive stories about Obama outnumbered negative dating back to late August.

For Mitt Romney in the final week, the tone of coverage remained largely unchanged from the previous two weeks. Negative stories in the press outnumbered positive ones 33% to 16%.

But Romney may have suffered in final days from the press focusing less on him relative to his opponent. After receiving roughly identical levels of coverage for most of October, in the last week of campaigning Obama was a significant presence in eight out of 10 campaign stories compared with six in 10 for Romney—one of the biggest disparities in any week after Labor Day.

Social media, however, was a different story:

[E]ach of the three major social media platforms offered a different sense of the candidates. On Twitter, for example, the conversation about Romney in the last week was the most positive of any during the general election while Obama’s was basically unchanged. On blogs, it was Obama who saw a surge in favorable conversation. On Facebook, the tenor changed relatively little in the final days. [Pew Research Center’s Project on Excellence in Journalism, November 19]

Posted on 11/20/12 10:06 AM by Alex Adrianson

The Minimum Wage Hurts the Very Workers It’s Supposed to Help

From the Foundation for Economic Education:

Posted on 11/20/12 09:37 AM by Alex Adrianson

The European Welfare State Is Collapsing

Alvaro Vargas Llosa:

Every decade since the 1970s the economic performance of the 27 countries that make up the European Union has deteriorated. In the 1970s, economic growth averaged 3.1 percent. In the 1980s the figure was 2.5 percent. In the 1990s it was 2.1 percent and in the last decade, 1.4 percent.

Obviously these averages don’t tell the whole story—some countries have done better than others. But the bulk of Europe has let the parasitical welfare state devour its social and economic energy. [Fox News, November 17]

Posted on 11/19/12 05:09 PM by Alex Adrianson

To Do: Stay Busy, Conservatives!

As our boss tells us every week, do something good for freedom. Here are some ideas:

• Learn about this year’s Bastiat Prize Winners. Named after the 19th century French economist and journalist Frederic Bastiat, the Bastiat Prize honors the writer who best demonstrates the importance of individual liberty and free markets with originality, wit, and eloquence. The awards have been given since 2002 by the International Policy Network. This year, the Reason Foundation continued the awards. Anne Jolis of the Wall Street Journal won first prize for her coverage of Europe’s economic crisis. John Robson of the Ottawa Sun won second prize, and Adrian Wooldridge of the Economist won third prize.

• Solve the mystery of the 2008 financial crisis! Or at least bookmark the Library of Economics and Liberty’s page that rounds up all the major theorizing about the causes of the crisis. 

• Young journalists, get your applications in for the Phillips Fellowship Program.

• Make a video on equality and submit it to Learn Liberty’s All Men Are Created Equal Video Contest.

• Conservative job seekers, mark your calendars for November 28th and 29th. That’s when the Leadership Institute will host a career workshop and job fair at the Hart Senate Office Building.

• Watch some cool videos: The American’s Enterprise Institute’s Nortax shows that you can explain the entitlement’s crisis to a 5-year-old. Instead of spoiling the ending of the Competitive Enterprise Institute’s new I, Pencil, we’ll just say it offers a complex plot. The Institute for Justice, meanwhile, is on the side of the schnitzel king and other mobile taverns in an epic food fight in Chicago.

(And check our Conservative Calendar for more things to do!)

Posted on 11/16/12 05:35 PM by Alex Adrianson

There’s an Epic Food Fight Going on in Chicago

And the Institute for Justice is fighting for the schnitzel king and liberty.  

Posted on 11/16/12 04:22 PM by Alex Adrianson

ObamaCare Adds $1.79 Per Hour to Labor Costs

If you are wondering why Denny’s, Papa John’s, Applebees and other restaurants are cutting jobs or shifting to part-time employees, here is the answer, from Betsy McCaughey:

If you get your health insurance through a job, you might lose it as of Jan. 1, 2014. That’s when the new “employer mandate” kicks in, requiring employers with 50 or more full-time workers to provide the government-designed health plan or pay a fine. The government plan is so expensive, it adds $1.79 per hour to the cost of a full-time employee. That’s incidental if you're hiring neurosurgeons but a hefty increase for hiring busboys and sales clerks.

Currently, employers in retail and fast-food industries pay less than half that to cover their workers. To avoid the costly mandate, some employers will push workers into part-time status. Other employers will opt for the fine. Either way, workers lose their on-the-job coverage.

Worse, they risk losing their jobs. Even the fine adds 98 cents an hour to the cost of labor, enough to make some employers cut back on their workforce.

As many as a third of employers are considering canceling coverage, according to McKinsey & Co. management consultants. [New York Post, November 12]

Posted on 11/16/12 02:51 PM by Alex Adrianson

I, Pencil

If you can see the complexity of the pencil then you understand a lot about how the world works:

Posted on 11/16/12 02:24 PM by Alex Adrianson

Who Is Securing Whom?

The Obama administration is contemplating the creation of government cyber security standards in order to protect the Internet from attacks that threaten national security. So does that mean the government will be running the Internet? Hard to say. The anticipated executive order tells the Secretary of Homeland Security to designate the critical infrastructure that needs protecting, tells the National Institute of Standards and Technology to create a Cybersecurity Framework, and then tells a variety of other agencies to figure out the extent to which they can use their existing regulatory authorities to encourage compliance with that Framework. Among the powers contemplated is an acquisition preference for companies that abide by the government’s standards. At this point, says Paul Rozenzweig, the unanswered questions include:

• How much would it cost?
• What “critical infrastructure” is covered?
• Would the standards be outdated before they take effect?
• What would investors and innovators do?
• Does the government have the requisite expertise?
• Are the standards really voluntary?
• Why does anyone think the federal government can develop good standards? [The Heritage Foundation, November 15]

However, we do know that the federal government itself has experienced 13 cybersecurity breaches of its own just since May 2012. The hacked agencies include the Centers for Medicare and Medicaid Services, the Department of Homeland Security, the Department of Justice, the Department of Energy, the Army, and the Navy. [The Heritage Foundation, November 13]

Posted on 11/16/12 02:14 PM by Alex Adrianson

The Foxes Are Still Guarding the Henhouse

Last Friday, seven governments that abuse human rights were elected to the United Nation’s Human Right Council: Ethiopia, Gabon, Ivory Coast, Kazakhstan, Pakistan, the United Arab Emirates and Venezuela. The UN’s Human Rights Council, remember, was created in 2006 to replace the UN’s Human Rights Commission, which had become a platform for human rights abusers to deflect criticism. See Thor Halvorson, president  of the Human Rights Foundation, in the Daily Caller [November 12] for a rundown on the abusers and their games.

Posted on 11/16/12 01:38 PM by Alex Adrianson

Health Insurance Premiums Are Up Over $2,000 Since ObamaCare’s Passage

Reports David Hogberg:

[T]o Capital Hill’s immense shock and surprise, premiums are actually rising, despite the fact that ObamaCare now forces insurance companies to (1) let kids up to age 26 onto their parents insurance policies, (2) cover “preventive” services such as birth control without a co-pay, and (3) pay rebates if they violate ObamaCare’s medical-loss-ratio standards. Why on earth would insurance premiums be going up?

Alas, they are. The latest National Survey of Employer-Sponsored Health Plans from consulting firm Mercer found that employer-based plans cost an average of $10,558 in 2012, up 4.1% from 2011. Employers expect that, on average, premium costs will rise another 5% in 2013, bring the average cost of employer-base coverage to about $11,085.

Back in 2009, the year before [ObamaCare] was passed, Mercer’s survey found that the average cost of such coverage was $8,945. That means that going into 2013, premiums will have risen about $2,140. [Investor’s Business Daily, November 15]

Posted on 11/16/12 01:15 PM by Alex Adrianson

ObamaCare’s Future Isn’t Read in the Election Returns

The flaws in ObamaCare, writes John Goodman, “are so serious that the Democrats are going to have to perform major surgery on the legislation in the next few years, even if all the Republicans do is stand by and twiddle their thumbs.”

According to Goodman, Congress will soon find a number of ObamaCare’s effects politically intolerable, including: Seniors will see a decline in the quality of care they receive because the new entitlement was financed largely from cuts to Medicare; people will find it harder to receive medical services because the law increases demand without doing anything to increase supply; the law’s structure of penalties on employers will induce a massive shift to part-time workers; and the exchanges encourage insurers to under-provide health care to the people who really need it. Most importantly, Goodman points out that ObamaCare cannot avoid making health insurance massively more expensive for everybody. He explains that both the size of the penalty for not having insurance and the powers that the Internal Revenue Service has to enforce the mandate will not be sufficient to avoid the problem of people choosing not to insure until they are sick. That problem of adverse selection will force premiums higher and higher until the marketplace is undermined. And strongly enforcing the mandate won’t work either, he explains:

For the past 40 years, health care spending has been growing at twice the rate of growth of our incomes, on the average. Nothing in ObamaCare is likely to change that. Yet if we are required to buy coverage and denied the right to scale back benefits, choose higher deductibles, etc., health insurance premiums will crowd out more and more of the average family’s budget. Eventually, health insurance costs will threaten to crowd out every other form of consumption! [John Goodman’s Health Policy Blog, November 12]

Posted on 11/16/12 12:52 PM by Alex Adrianson

We’ve Forgotten Why the Senate Was Created

If you’re worried about incompetence among senatorial candidates, then perhaps we should re-consider the 17th amendment, as Kathryn Ciano observes:

The whole point of the American founders’ decision to divide the legislature in the first place was to protect states’ rights in one house, free from bungling attempts like the [National Republican Senatorial Committee’s] to direct the popular will and influence special interest groups.

Enacted in 1913, the 17th Amendment restructured the government so that there is no difference between how senators and representatives are elected. This is in stark contrast to how the U.S. Constitution imagined the country would be run.

The Constitution outlined a legislative branch in which Americans didn’t actually directly elect senators—state legislators did. This reflected the fact that the House was intended to represent individuals’ rights, while the Senate stood for states’ rights. Individuals, the founders believed, would be better represented overall with two separate levels of accountability before submitting to the ultimate will of the federal government on high.

Federalism was an important principle for the founders, and federalism holds states’ rights paramount. Supreme Court Justice Antonin Scalia has gone so far as to note that since the 17th Amendment was ratified, “you can trace the decline of so-called states’ rights throughout the rest of the 20th century.” [Wall Street Journal, November 15]

Posted on 11/16/12 11:47 AM by Alex Adrianson

Your Electric Vehicle Won’t Pay Off for Six and a Half Years

Even with government subsidies, electric vehicles are still too expensive to get most consumers to consider buying, finds a new study by J.D. Powers & Associates.

Of the consumers considering an EV as their next primary vehicle, only 11 percent list environmental concerns as a leading reason to buy, while 45 percent name the cost-savings benefit of an all-electric powertrain as their key reason to buy an EV. […]

Neal Oddes, senior director of the green practice at J.D. Power and Associates, said “there still is a disconnect between the reality of the cost of an EV and the cost savings that consumers want to achieve.”

Compared with sales prices for a similar gasoline-powered vehicle, the study finds that owners of electric vehicles pay a premium of $10,000, on average, for their vehicle, while plug-in hybrid electric vehicle (PHEV) owners pay a $16,000 premium, on average.

Based on annual fuel savings it would take an average of six and a half years for EV owners to recoup the $10,000 premium they paid at the point of purchase, while the payoff point for PHEV ownership is 11 years. Again, these payback rates are based on participant-reported averages.

“The payback period is longer than most consumers keep their vehicle,” said Oddes. [, November 15]

Good thing the auto industry is free to respond to consumer demand instead of worrying about political things like what kind of cars the Obama administration thinks it should build.

Posted on 11/15/12 05:25 PM by Alex Adrianson

ObamaCare Has a Problem—Another One, Anyway

Yes, ObamaCare is an expensive entitlement, it isn’t paid for, it raises taxes, it creates byzantine incentives for companies to avoid hiring, it makes health insurance more expensive, it limits consumer choices, it will make services scarce for the truly vulnerable, and it will reduce medical innovation. But aside from all that, it’s fine, right? Nope:

By the end of this week, states must decide whether they will build a health-insurance exchange or leave the task to the federal government. The question is, with as many as 17 states expected to leave it to the feds, can the Obama administration handle the workload.

“These are systems that typically take two or three years to build,” says Kevin Walsh, managing director of insurance exchange services at Xerox. “The last time I looked at the calendar, that’s not what we’re working with.” [Washington Post, November 12]

As Sarah Kliff goes on to explain, the government faces numerous technological challenges in setting up the exchanges. If, as Leonard Read teaches us, even pencils are so complex that no one person can understand every step in the process of making one, then do really think a central authority can create an Expedia for health care?

Posted on 11/15/12 04:39 PM by Alex Adrianson

Regulations v. Hurricane Recovery

Occupational licensure is getting in the way of New York’s recovery from Hurricane Sandy, observes Walter Olson, noting this news account:

A Long Island Power Authority official told a crowd of 300 Rockaway residents that they would need to hire a licensed city electrician to inspect their homes before LIPA could restore power, and suggested the homeowners print out inspection forms — from the Internet.

“But we don’t have power!” the crowd shouted back at LIPA’s vice president of operations, Nicholas Lizanich. …

“On a scale of zero to 100, I give [LIPA] a zero,” grumbled homeowner Jim Silvestri, who asked whether he could use a Nassau County-certified electrician and was told no.

“There’s not enough licensed electricians in the City of New York to take care of this,” he added. [New York Post, November 12]

Olson continues:

It’s at a time of disaster that the irrationality of so many market-blocking rules, licensure among them, becomes most obvious. In a splendid report issued by the Institute for Justice in May, License To Work: A National Study of Burdens from Occupational Licensing, by Dick M. Carpenter II, Lisa Knepper, Angela Erickson (formerly of Cato) and John K. Ross examine what should be the most dispensable tranche of occupational licensure laws, those for occupations like bartender, shampooer and animal trainer, typically lower-income and often somewhat entrepreneurial that are licensed in some but not all of the fifty states. Usually, the result is a controlled real-world demonstration that without the legal restriction of a given trade, life just goes on normally.

 Of the 102 low-income occupations they examine, one with an obvious nexus to disaster recovery is tree trimmer, an occupation licensed in just 7 states. […] Three states that suffered extensive tree downage from Sandy — Maryland, Connecticut and Rhode Island — forbid unlicensed tree trimming, although many a property owner would probably have appreciated the legal right to hire someone from a neighboring state to clear a blocked driveway. [Cato-at-Liberty, November 12]

Posted on 11/14/12 07:04 PM by Alex Adrianson

The Entitlements Crisis Explained by Cartoon

From the American Enterprise Institute:

Posted on 11/12/12 01:40 PM by Alex Adrianson

To Do: Meet the Young Leaders of the Conservative Movement

• Give a toast to the young conservatives who are making a difference today. The Young Conservatives Coalition will give its Buckley Awards on November 14th at the Capitol Hill Club. The festivities begin at 5:30 p.m. This year’s honorees are Katie Pavlich, editor at and author of bestseller Fast & Furious; Lila Rose, president of Live Action; Patrick Coyle, vice president of the Young America's Foundation; Alex Schriver, national chairman of the College Republican National Committee; and Heather Pfitzenmaier, director of the Young Leaders Program at The Heritage Foundation.

• Check out the new Tea Party News Network to stay current on Tea Party activities and perspectives on the news.

• Tune in to to see the new movie based on Leonard Read’s classic story I, Pencil. The movie will be released November 15.

• Learn how Stalin’s secret agents were making policy in the Roosevelt administration. At noon on November 15th, The Heritage Foundation will host M. Stanton Evans, author of Stalin’s Secret Agents: The Subversion of Roosevelt’s Government.

Posted on 11/09/12 02:29 PM by Alex Adrianson

The Problem Isn’t the Fiscal Cliff

It’s the spending cliff:

Posted on 11/09/12 11:40 AM by Alex Adrianson

The View from Texas

Brooke Rollins, President of the Texas Public Policy Foundation:

The question for those of us in the liberty movement is the same question Robert Redford’s character asked at the end of the 1972 classic, “The Candidate”: “What do we do now?” For us at the Texas Public Policy Foundation, and answer to that question is crystal clear.

We keep defending Texas.

We keep defying Washington, D.C.

You’ve heard me say it time and again over the last four years that Texas is where freedom proves its case. That reality is cast in stark relief when you consider the record:

• Texas accounting for a near-majority of American job creation across the past half-decade.
• Texas attracting nearly a thousand Americans a day in search of a better life and more opportunity.
• Texas beating the national unemployment rate, despite the immigrant influx, for nearly five full years.
• Texas boasting some of the cleanest big-city urban air quality in America.
• Texas surging past big-state peers like California in nearly every relevant metric.
• Texas becoming America’s largest manufacturing state.
• Texas becoming an epicenter of the fracking-led American energy revolution.

The Lone Star State accomplished all that — and more — in the teeth of Washington, D.C.’s mismanagement, and sometimes opposition, during the worst national economic times since the Great Depression. That’s extraordinary. And it’s a testament to what a free people can do when they’re allowed to be free. [Texas Public Policy Foundation, November 7]

Posted on 11/09/12 11:26 AM by Alex Adrianson

Despite Obama’s Re-election, His Signature Health Care Law Will Be Back on the Table Soon

No, a President Romney isn’t going to repeal ObamaCare with the help of Republican majorities in Congress. But lawmakers still need to reckon with reality, and the reckoning may happen sooner than 2014, when the major provisions of the law kick in. Stuart Butler elaborates:

The reaction of employers to the [Affordable Care Act] is likely to be the first pressure point for changes in the ACA or at least the suspension of some of its provisions. Employers have been reporting for some time that concerns about mandatory benefits are slowing their hiring. And as the Wall Street Journal recently reported, lower-wage employers are moving towards hiring part-time employees to avoid the ACA’s penalties. These patterns will only grow in 2013 as many employers eye the prospect of putting their employees into the heavily subsidized exchange plans. And the possibility of larger-than-expected enrollment in health insurance exchanges will sharply increase the budget costs, adding to the deficit pressures to curb the ACA.

These developments in the economy will force Congress to reopen key ACA coverage provisions, perhaps as part of a deficit reduction package. Effects on employment and continued increases in health care costs could also increase the prospects of a bipartisan redesign of employer-based coverage within a tax reform package. That could involve switching clumsy mandates and penalties on employers for the kind of structural tax reform that many Republican and administration insiders have actually long supported—measures that gradually curb and eventually replace the current tax exclusion for employer-sponsored coverage with tax credits and subsidies that would apply to all employees.

Butler also predicts that the hunt for deficit-reduction measures will put block grants for Medicaid and premium support reforms for Medicare back on the table. [News@JAMA, November 8]

Posted on 11/08/12 05:48 PM by Alex Adrianson

Now Is Not a Good Time to Be on the Enemies List

Peter Wallison:

The Reuters headline yesterday said it all: “Wall Street left to rebuild Obama ties after backing Romney.” And so it begins. The government has become so powerful in the financial services field that private sector firms now have to “rebuild ties” after an election to avoid adverse rulings from their regulators.

If you are worried about crony capitalism, this is where it starts. Because of Dodd-Frank, Wall Street and the financial services industry generally will now be firmly in the control of the government. In the future, as long as the act remains in force, we can expect that Wall Street firms will be solid supporters of the administration in power. No CEO will risk the possibility that opposing administration policy will bring an adverse regulatory finding or an enforcement action.

However, that isn’t all. Under Dodd-Frank, if the secretary of the treasury believes that a financial firm in danger of failing could cause instability in the US financial system, he is has the power to seize the firm and turn it over to the FDIC for liquidation. If the company objects, the secretary can invoke the power of a court, but the court has only one day to decide whether the secretary’s act was reasonable. If the court does not act in that one day, the firm is turned over to the FDIC “by operation of law.” It does not take much political savvy for financial firms to realize that opposing the secretary of the treasury could be dangerous to their continued existence. [AEIdeas, November 8]

It also does not take much savvy to imagine the mischief politicians will perpetrate under Dodd-Frank.

Posted on 11/08/12 03:57 PM by Alex Adrianson

A Program for the Bolt Hole: Hit the Books, Conservative Candidates

The conservative candidates in this election were especially weak, and one reason for that is that they are the product of American higher education, says Mark Bauerlein:

[T[hose politicians didn’t study any conservative thinkers in college. When they talk, they say nothing that suggests they have read much serious discourse on the right side of the spectrum from Burke to Charles Murray. Leftists have their nostrums down pat (against racism, sexism, imperialism, economic inequality . . .), and however dated and predictable those utterances are, liberal politicians stick to the point and press it again and again. Again, one reason is that they received ample helpings of liberalism in freshman English, history, any “studies course,” sociology, etc., reading some Marx, Foucault, Dewey, Malcolm X, a bit of feminism here and multiculturalism there. In school, those future conservative politicians likely rejected those texts, but they didn’t plunge into the other side’s corpus.

It shows in the absence of depth in so many Republican candidates. When you hear them speak, nothing in the tradition comes through—no Franklin on work ethic, Madison-Hamilton-Jay on power, Emerson on self-reliance, Hawthorne on Federal employment, Thoreau on Big Government, Booker T. Washington on individual responsibility, Willa Cather on the pioneer spirit, and Hayek on social engineering. This is a fatal deficiency, and it neglects one of the strengths of conservatism (superiority in the battle of ideas). Worse, when conservatives don’t have the tradition in their background, when they lose elections, they tend to look forward by examining their relationship to the electorate instead of their relationship to first principles and values. Conservative candidates don’t need more political calculation that competes with liberalism, but rather more intellectual heft that presents a better alternative to liberalism. [Minding the Campus, November 7]

Here is the good news: The Right doesn’t need to invent anything new to fix this problem. It already has many organizations and programs that do an excellent job of teaching the foundational principles of American self-government. These organizations and programs include the Acton Institute, the American Enterprise Institute’s Values & Capitalism initiative, the Ashbrook Center, the Cato Institute’s Cato University, the Center for Political and Economic Thought at Saint Vincent College, the Claremont Institute, the Federalist Society, the Fund for American Studies, The Heritage Foundation’s First Principles Initiative, Hillsdale College’s Kirby Center for Constitutional Studies and Citizenship, the Institute for Humane Studies, the Intercollegiate Studies Institute, and the John Jay Fellow Program.

Candidates of the future who truly want to defend and promote American liberty should get in touch with the organizations listed above, and conservatives who want to help develop future leaders should consider becoming supporters of all of those organizations listed above.

Posted on 11/08/12 12:59 PM by Alex Adrianson

When Things Get Bad Enough

France’s socialist government, presiding over an economic shambles, is seriously considering a competitiveness program, parts of which could have been written by a free market think tank. Liz Peek reports:

Earlier this week, the Hollande government announced it would cut payroll taxes for businesses to overcome what Prime Minister Ayrault described as “ten years of industrial stagnation.”

The move was in response to a government-sponsored report just out on how to stem the country’s competitive decline.  It was something of a surprise coming from a group whose first instinct was to slap a 75 percent marginal income tax rate on high earners. The paper, authored by Louis Gallois, former CEO of European Aeronautic Defense & Space Companie, recommends 22 measures to “stop the slide” and deliver what is described as a “competitiveness shock.” […]

Gallois’ includes the just-enacted reduction in the portion of the state’s welfare cost burden borne by industry as well as a slew of other measures. They include avoiding “new layers of regulation” to “ensure better long-term visibility,” helping small businesses, reducing “legal and fiscal obstacles for small firms seeking to grow into mid-sized companies, simplifying export credits and maintaining tax credits and public funding for research and innovation. He also recommends putting four workers on the boards of large companies, to try to soften France’s “us vs. them” labor mentality.

Most shocking perhaps is the suggestion that France would do well to research exploring possible shale gas reserves that are among the largest in Western Europe “despite environmental concerns.” [Fiscal Times, November 7]

Posted on 11/08/12 10:38 AM by Alex Adrianson

The White House Knew

The Central Intelligence Agency this week released a timeline of its actions regarding the Benghazi attack on 9/11/12. If you read the timeline closely, as Brett Baier does, you’ll find the smoking gun:

“1:15 a.m.: CIA reinforcements arrive on a 45-minute flight from Tripoli in a plane they’ve hastily chartered. The Tripoli team includes four GRS security officers, a CIA case officer and two U.S. military personnel who are on loan to the agency. They don’t leave Benghazi airport until 4:30. The delay is caused by negotiations with Libyan authorities over permission to leave the airport, obtaining vehicles, and the need to frame a clear mission plan. The first idea is to go to a Benghazi hospital to recover Stevens, who they correctly suspect is already dead. But the hospital is surrounded by the Al Qaeda-linked Ansar al-Shariah militia that mounted the consulate attack.”

So the U.S. Ambassador to Libya is at the Benghazi hospital and suspected dead. The CIA contractors know that, but they can’t get there because the hospital is surrounded by the Al Qaeda-linked group Ansar al Shariah, the “militia that mounted the consulate attack.” 

This goes up the chain communication at 1:15 a.m. on Sept. 12. The White House, the Situation Room, and all of those paying attention to intel channels know that the guys on the ground have determined the group that’s behind this. It’s the Al Qaeda-linked militia that are still fighting and have the hospital surrounded.

About 12 hours later – before heading to Las Vegas for a campaign event – Obama sits down for that “60 Minutes”  interview with Steve Kroft. [Fox News, November 5]

That would be the interview in which Obama says he isn’t sure the attack was an act of terrorism. The key portion of that interview was not released by CBS News until two days before the election. Three days after the attack, White House Press Secretary Jay Carney told the press that the administration had no information to suggest the attack was preplanned. [Washington Times, October 11]

Posted on 11/07/12 06:59 PM by Alex Adrianson

More Paperwork Ahead

Come 2014, you’ll have to fill out an additional form revealing personal health information in order to help the Internal Revenue Service verify that you are complying with the ObamaCare individual mandate. Americans for Tax Reform imagines what that form might look like:

Wolf Final

Posted on 11/07/12 06:30 PM by Alex Adrianson

Twas Ever Thus

“Government is a broker in pillage, and every election is a sort of advance auction sale in stolen goods.” —Henry Louis Mencken

“It has been said that democracy is the worst form of government except all the others that have been tried.” —Winston Churchill

Posted on 11/07/12 06:10 PM by Alex Adrianson

ObamaCare’s Medical Device Tax Is Already Killing Jobs and Innovation

… reports Quinn Hillyer:

The president's health law imposes a 2.3% tax on all medical device sales. This doesn't sound like much, but that's misleading. The tax is not on profits, but on gross (total) receipts. For smaller device manufacturers with narrow profit margins, the tax could actually exceed their profits, pushing them into the red. Such is the case with companies known as ConMed (with possible job losses in swing states Colorado and Florida), Symmetry Medical (job centers in swing states Michigan and New Hampshire), and ultrasound pioneer Sinosite.

Some medical-device makers, such as Stryker (headquarters: Kalamazoo, Michigan) and Zimmer Holdings (job locations in Nevada, Minnesota, Ohio, and Pennsylvania), already have announced layoffs (1,000 and 450, respectively) as a result of the tax.

In all, some 43,000 jobs could be lost due to the tax, according to a widely-cited, but industry-funded study. Another report, out just two weeks ago, showed venture capital fleeing the medical device industry, presumably in response to the new ObamaCare tax. Such investment is down for the third straight quarter, to levels as low as in 2004. [USA Today, November 3]

Posted on 11/07/12 05:30 PM by Alex Adrianson

Federal Grants Make Up Over One-Third of State Budgets

That’s as of 2010, according to a new analysis from the Pew Center on the States, based on the Census Bureau’s Survey of State Government Finances. In 2000, the figure was about one-fourth. [Pew Center on the States, October 31]

Here’s how it works: Taxpayers send a bunch of money to Washington, and then Washington sends it on to the states. But they don’t send all of it on. Some of it stays in Washington to pay the bureaucrats in charge of sending it on to the states. Also, in order to get some of that money states have to spend even more of their own citizens’ money. Finally, if taxpayers don’t like how much money they have to send to Washington, they can vote for a different congressman or different senators. Thus, each taxpaying citizen gets to vote for three of the 535 people who get to vote on how high his taxes are.

Have we spotted any problems with this plan yet?

Posted on 11/06/12 01:03 PM by Alex Adrianson


Lots of really bad fact checking has been committed during this election cycle, notes Ben Domenech, who provides a rundown of the ten worst. Most fact checkers seem to think that finding out whether politicians’ facts really are facts isn’t really their job. Instead, they think they’re supposed to make cosmic judgments about politicians’ arguments. That wouldn’t be a problem if they didn’t call it fact checking, but they do call it fact checking and the result is that they end up calling people liars who haven’t actually lied. What should we call such fact checkers?

One hilarious example:

That thing you said is true, but it doesn’t matter. One of my personal favorites: Senior Pinocchio Manager Glenn Kessler admits that the CBO calculates the effect of Obamacare will be 800,000 workers dropping out of the workforce. But this doesn’t matter, you see, because Kessler describes 800,000 jobs as “basically a rounding error”. Kessler does this while simultaneously maintaining that the stimulus had a meaningful and positive effect on jobs – “some jobs were created, and many were saved.” Presumably the Washington Post’s headline had the jobs report shown an 800,000 increase would have been “JOBS INCREASE BASICALLY A ROUNDING ERROR.”

That’s just one of Domenech’s ten worst list, which is reproduced by Avik Roy at Forbes. [Forbes, November 5]

Posted on 11/05/12 06:22 PM by Alex Adrianson

Two Ways to Describe 171,000 More Jobs

Catherine Rampell: “Jobs Report Shows Persistent Economic Growth.” [New York Times, November 2]

James Pethokoukis: “If we suddenly had a string of months where job growth was the same as in October, it would take 7 more years — until 2019 ! — to get back to the Bush unemployment low of 4.4%. [AEIdeas, November 2]

Posted on 11/02/12 01:19 PM by Alex Adrianson

To Do: Vote and then Get on with Your Life

If, like Abby Evans, you are looking forward to November 7, here are some options for your post-election to-do list:

• Find out if the bankruptcy process can be applied to states that run out of money. The American Enterprise Institute hosts author David A. Skeel Jr. at 4:30 p.m. on Thursday, November 8th.

• Get your ticket for the American Spectator’s Robert Bartley Gala. Ben Stein will be the MC and Tom Coburn will give a keynote address. The gala will be November 14th at the Capital Ballroom.

• Discover the rising stars in the conservative movement. The Young Conservative Coalition will host its annual Buckley Awards on November 14th at the Capital Hill Club in Washington, D.C. The awards begin at 5:30 p.m.

(See the Conservative Calendar at for more events.)

Posted on 11/02/12 10:41 AM by Alex Adrianson

Putting Fraudulent Claims in Your Brief Could Be Taken as Proof that You Have Engaged in Fraud

Professor Michael Mann’s lawsuit against the Competitive Enterprise Institute and National Review has run into a little problem. Mann claims in his lawsuit that he was a co-winner of the 2007 Nobel Peace Prize for his contributions to the Intergovernmental Panel on Climate Change. Some actual fact checkers used a 20th century device called the telephone to call the Nobel Committee and ask; the committee said: No. Only the IPCC as an organization and Al Gore won the 2007 award. But Penn State University, apparently, didn’t bother to make a phone call when it conducted its own investigation into Mann’s work.

Mark Steyn (one of the named parties in the lawsuit) thinks that error could be material to the case. Mann’s claim that CEI and National Review defamed him relies in part on Penn State’s “exoneration” of his work, and that investigation in turn cited Mann’s Nobel as one of the reasons for concluding his work was copacetic. Steyn quotes the Penn State review:

Moreover, Dr. Mann’s work on the Third Assessment Report (2001) of the Intergovernmental Panel on Climate Change received recognition (along with several hundred other scientists) by being awarded the 2007 Nobel Peace Prize. Clearly, Dr. Mann’s reporting of his research has been successful and judged to be outstanding by his peers. This would have been impossible had his activities in reporting his work been outside of accepted practices in his field. [National Review, November 1]

Of course, if Mann hadn’t been thoroughly ensconced in an ivory tower bubble, he might have noticed that claiming to be a Nobel Peace Prize Winner no longer carries much weight, as National Review’s recent ad in the Penn State student newspaper very cleverly pointed out.

Posted on 11/01/12 10:23 PM by Alex Adrianson

What’s in the Box?

The Obama administration hasn’t released a regulatory agenda since last year, though it is required by law to do so every April and October. That doesn’t mean more regulations aren’t coming, just they’ve been held up for the time being. That puts businesses that might be affected by new regulations—which is a lot of businesses—in a bind: They can’t make plans for the future if they don’t know what their costs are going to be.

Some details of the problem, from Diane Katz:

The EPA is the single largest source of the regulations currently pending at [the Office of Information and Regulatory Affairs], with a total of 29. Of those, 27 are designated as “economically significant,” meaning that costs will exceed $100 million or more annually. Runner-up is Health and Human Services (16), followed by the Department of Labor (11) and the Departments of Energy and Transportation (10).

Among the most costly:

• A Department of Transportation (DOT) rule to require a rear-view camera and video display for all new cars and trucks at an estimated cost of up to $2.7 billion. The regulation was submitted to OIRA on November 16, 2011.

• A DOT proposal to require “a means of alerting” blind and other pedestrians of approaching hybrid and electric vehicles. The agency has not developed a cost estimate but has concluded that “only beneficial outcomes will occur.” The proposal was submitted to OIRA on May 10, 2012.

• Final revisions to the so-called Boiler MACT rules that impose stricter limits on industrial and commercial boilers and incinerators. The cost of the original rules was pegged at $9.5 billion by the EPA and $20 billion by the economic forecasting firm IHS Global Insight (for the Council of Industrial Boiler Owners). The stringency and cost of the original rules provoked an outpouring of protest and some 5,800 comments citing technical and statutory errors. Ultimately, EPA officials were forced to undertake revisions, which were submitted to OIRA on May 17. [The Heritage Foundation, October 31]

And there’s a bunch more in the queue.

Posted on 11/01/12 08:48 PM by Alex Adrianson

Don’t Let the Politicians Fool You on Medicare

See also: “Premium Support: Medicare’s Future and It’s Critics,” by Robert E. Moffit, The Heritage Foundation, August 7, 2012.

Posted on 11/01/12 08:30 PM by Alex Adrianson

Study Finds Male Lawyers Make More than Female Librarians

The American Association of University Women is trying to get young professional women politically motivated with shoddy research on pay equity, says Diana Furchtgott-Roth. She takes apart AAUW’s recent study claiming “just one year out of college, millennial women are paid 82 cents for every dollar paid to their male peers. Women are paid less than men even when they do the same work and major in the same field”:

Buried in the report is the finding that, accounting for college majors and occupations, women make 93 cents (not 82) on a man’s dollar. The remaining seven cents, the authors contend, is likely due to discrimination, because they cannot explain it. So let me offer a possible explanation for them: The study’s occupational categories are too broad. One cannot draw precise conclusions about pay equity when comparing workers within fields such as “Other White Collar,” “Business and Management” and simply, “Other Occupations.”

A footnote tells readers that “Other White Collar” includes “social scientists and related workers ... ; lawyers, judges, and related workers; education, training, and library occupations ... ; arts, design, entertainment, sports, and media occupations; social science research assistants; and law clerks.” So, the AAUW report compares the pay of male lawyers with that of female librarians; of male athletes with that of female communications assistants. That’s not a comparison between people who do the same work.

“Other Occupations” includes jobs in construction and mining, a high-paying, male-dominated occupation, and also jobs in food preparation and serving occupations, a low-paying, female-dominated occupation. If a waitress is paid less than a miner, does it follow that it’s because she’s been discriminated against? [Washington Examiner, October 30]

No, it doesn’t.

Posted on 11/01/12 08:07 PM by Alex Adrianson

Some Deficit History

From Jeffrey Anderson:

From December 1941 to August 1945, the United States of America joined the other Allied powers and fought against the Axis powers in Europe and the Pacific, during the greatest and most destructive war in all of human history. Victory required the complete dedication of the American citizenry, as well as an extraordinary amount of deficit spending to fuel the war effort. According to official tallies from the White House Office of Management and Budget (OMB), deficit spending spiked more than 13-fold from 1940 to 1943, remaining at that soaring new level through 1945. By the end of the war, the American and Allied cause had emerged triumphant, liberating hundreds of millions of people from tyranny. But along the way, we had (quite understandably!) racked up staggering and unprecedented sums of deficit spending.

But it was nothing compared to deficit spending under President Obama.

In fact, under Obama, the federal government has already racked up almost twice as much deficit spending — in real (inflation-adjusted) dollars — as it did during all of World War II. According to the White House OMB, we ran up $1.8 trillion in real (inflation-adjusted) deficit spending during fiscal years 1942-45. According to figures from that same source, the Treasury Department, and the Congressional Budget Office (CBO), we’ve now run up $3.4 trillion in real (inflation-adjusted) deficit spending under Obama — in less time than it took us to fight World War II. [The Weekly Standard, November 1]

We generally agree that with the view that deficits are just an indicator of another problem: Too much spending. The above comparison is one heck of an indicator.

Posted on 11/01/12 07:50 PM by Alex Adrianson

Price Coordination to the Rescue

Things are getting dicey at gas stations in the Northeast. [MSNBC, November1] What New York and New Jersey could use right now is some price-gouging. Seriously, explains Matt Yglesias:

The Christie administration fined a gas station for breaking price gouging rules back in September, and issued a press release before Sandy hit noting that case and explicitly warning retailers not to respond to the hurricane by raising prices. The failure to allow prices to adjust doesn’t magically eliminate the supply side problems, it just means that the gasoline is misollacated and lots of people need to waste time in line. You can also see that the combination of shortage and underpricing seems to be leading people to overconsume when they do get to the front of the line.

Last but by no means least, the lack of price gouging is harming things on the supply side. If it were possible to earn windfall profits by transporting gasoline into the affected areas, then human ingenuity would be finding ways to do it. But if you restrict retailers to earning merely ordinary profits, then people won’t take extraordinary measure to increase supply. [Slate, November 1]

Posted on 11/01/12 07:40 PM by Alex Adrianson

The Benghazi Story Is Still Changing

Remember when the Obama administration had concrete evidence the attack on Benghazi was just a protest that got out of hand? Then remember when the “fog of war” (even though the administration wasn’t calling it war at the time) made it hard for the administration to figure out what was happening on the 11th anniversary of 9/11? Then remember when Hillary Clinton said reports of Ansar al-Sharia claiming responsibility for the attack on the very night it happened didn’t carry much weight because the claims were made via social networks?

Well, one reason Clinton might might have given those claims some weight was that they tracked with information her department had already received about militant activity in Benghazi. The latest scoop from Fox News:

The U.S. Mission in Benghazi convened an “emergency meeting” less than a month before the assault that killed Ambassador Chris Stevens and three other Americans, because Al Qaeda had training camps in Benghazi and the consulate could not defend against a “coordinated attack,” according to a classified cable reviewed by Fox News.

Summarizing an Aug. 15 emergency meeting convened by the U.S. Mission in Benghazi, the Aug. 16 cable marked “SECRET” said that the State Department’s senior security officer, also known as the RSO, did not believe the consulate could be protected.

“RSO (Regional Security Officer) expressed concerns with the ability to defend Post in the event of a coordinated attack due to limited manpower, security measures, weapons capabilities, host nation support, and the overall size of the compound,” the cable said.

According to a review of the cable addressed to the Office of the Secretary of State Hillary Clinton, the Emergency Action Committee was also briefed “on the location of approximately ten Islamist militias and AQ training camps within Benghazi … these groups ran the spectrum from Islamist militias, such as the QRF Brigade and Ansar al-Sharia, to ‘Takfirist thugs.’” [Fox News, October 31]

If one didn’t know better, one might think the administration deliberately ignored signs that the attack was the work of an al-Qaeda affiliate because a non-terrorist-based narrative was the better option politics-wise.

Posted on 11/01/12 07:06 PM by Alex Adrianson

Cutting Out the Education Middle Man

Teachers are no more immune from technologically induced disintermediation than car salesman, or so it seems, judging from the experience of the children in two remote Ethiopian villages. The children, who have no regular teachers, were given tablet computers preloaded with learning programs by the group One Laptop Per Child. The group’s founder, Nicholas Negroponte, told MIT Technology Review’s EmTech conference last week that the early observations show the effort has great potential.

After several months, the kids in both villages were still heavily engaged in using and recharging the machines, and had been observed reciting the “alphabet song,” and even spelling words. One boy, exposed to literacy games with animal pictures, opened up a paint program and wrote the word “Lion.”

The experiment is being done in two isolated rural villages with about 20 first-grade-aged children each, about 50 miles from Addis Ababa. One village is called Wonchi, on the rim of a volcanic crater at 11,000 feet; the other is called Wolonchete, in the Rift Valley. Children there had never previously seen printed materials, road signs, or even packaging that had words on them, Negroponte said.

Earlier this year, OLPC workers dropped off closed boxes containing the tablets, taped shut, with no instruction. “I thought the kids would play with the boxes. Within four minutes, one kid not only opened the box, found the on-off switch … powered it up. Within five days, they were using 47 apps per child, per day. Within two weeks, they were singing ABC songs in the village, and within five months, they had hacked Android,” Negroponte said. “Some idiot in our organization or in the Media Lab had disabled the camera, and they figured out the camera, and had hacked Android.” [Mashable, October 29]

Teachers unions, take note.

Posted on 11/01/12 06:30 PM by Alex Adrianson

Not Every Storm Is a Sandy

There’s no time like the present to point out that setting priorities is important even for the Federal Emergency Management Agency. Heritage fellow Matt Mayer:

Over the last two decades, more and more routine natural disasters that from 1787 to 1992 would have been entirely dealt with and paid for by states and localities have been nationalized by FEMA. From 28 FEMA declarations per year under President Ronald Reagan to more than 141 FEMA declarations per year under President Barack Obama, FEMA now gets involved with smaller scale events like tornadoes, snowstorms, floods, fires, and other events that have no national or regional impact.

Because a FEMA declaration comes with a shifting of at least 75 percent of costs to the federal government (read: the other 49 states), governors rush to FEMA as a cost-saving measure, not because their states are overwhelmed. With so many declarations being issued per year, FEMA resources (people, time, and money) are spread too thinly.

We need to save FEMA and its finite resources for the big events like Hurricane Sandy, Hurricane Katrina, the Northridge earthquake, and the 9/11 terrorist attack; conversely, states and locals need to bear the costs of those routine natural disasters that occur in their states. Ohioans shouldn't have to subsidize tornadoes in Oklahoma and Oklahomans shouldn't have to subsidize floods in Ohio. [U.S. News & World Report, Debate Club, November 1]

Posted on 11/01/12 06:29 PM by Alex Adrianson

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