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InsiderOnline Blog: December 2012

To Do: Recognize Our Social Entrepreneurs

• Nominate someone for a social entrepreneurship award. The Manhattan Institute is accepting nominations for both its William E. Simon Prize for Lifetime Achievement in Social Entrepreneurship, and its Richard C. Cornuelle Award for Innovation in Social Entrepreneurship. Nominations will be accepted through March 1, 2013.

• If you can fit any television watching into your schedule this holiday season, you might make time for the PBS series “First Freedom: The Fight for Religious Liberty,” which tells story of how the nation’s founders gave us the freedom of choice in religious matters.

• Still looking for just the right Christmas gift? For some ideas, check out Reason magazine’s review of the year in books. Yep, books still exist!

• Have a merry Christmas and a happy New Year! Also, please accept our thanks for reading our newsletter! We’ll see you again at the begginning of the year.

Posted on 12/20/12 02:34 PM by Alex Adrianson

Regulation Makes It Expensive to Employ People

The total federal regulatory burden is at least $1.8 trillion per year and growing. More than 3,500 new rules have come into effect each year of both George W. Bush’s and Barack Obama’s presidencies. The Code of Federal Regulations, where all these rules are stored, is more than 169,000 pages long. Small businesses spend more than $10,000 per employee per year to comply with federal rules.

As Ryan Young and Wayne Crews observe, trimming the regulatory state with a commission modeled on the Base Closure and Realignment Commission would be one way of helping the economy. [Washington Times, December 18]

Posted on 12/20/12 01:33 PM by Alex Adrianson

The IRS Will Continue Reporting Migration Trends

The Internal Revenue Service has reversed its decision to discontinue compiling data on taxpayer migration between the states. Last week we noted the initial news of the IRS decision, observing: “It’s hard not to suspect that this kind of information is just too embarrassing to the high-tax, union-run blue states that keep losing people to the low-tax, right-to-work red states.”

But as the Tax Foundation noted on Tuesday, the IRS has now said it will continue tabulating the migration information after all. So, carry on.

Posted on 12/20/12 01:24 PM by Alex Adrianson

As He Leaves the Senate, Jim DeMint Is Focused on Ideas

Sen. Jim DeMint, who will become President of The Heritage Foundation in April, gave his farewell speech to the Senate on Thursday, saying: 

I’m not leaving here to be an advocate for the Republican Party. I hope that we can create more common ground between the political parties by showing everyone that ideas that work for their constituents, and for our constituents, are right in front of our faces. [from video posted at Washington Examiner, December 20]

Posted on 12/20/12 01:14 PM by Alex Adrianson

Another Victory Against the HHS Mandate

On Tuesday, a federal appeals court overturned the dismissal of Wheaton College and Belmont Abbey’s lawsuits against the Department of Health and Human Services over the HHS contraception mandate. The Becket Fund, representing the schools, describes the result this way:

Last summer, two lower courts had dismissed the Colleges’ cases as premature. Today, the appellate court reinstated those cases, and ordered the Obama Administration to report back every 60 days—starting in mid-February—until the Administration makes good on its promise to issue a new rule that protects the Colleges’ religious freedom. The new rule must be issued by March 31, 2013. […]

The court based its decision on two concessions that government lawyers made in open court. First, the government promised “it would never enforce [the mandate] in its current form” against Wheaton, Belmont Abbey or other similarly situated religious groups. Second, the government promised it would publish a proposed new rule “in the first quarter of 2013” and would finalize it by next August. The administration made both concessions under intense questioning by the appellate judges. The court deemed the concessions a “binding commitment” and has retained jurisdiction over the case to ensure the government follows through. [The Becket Fund, December 18]

For updates on all 42 cases (including those of plaintiffs not represented by the Becket Fund) check out Becket’s HHS Mandate Central page.

Posted on 12/20/12 12:20 PM by Alex Adrianson

Israel’s Gun Culture Makes It Safer than the United States

Israel has plenty of guns circulating and fairly porous gun controls, but has never experienced school shootings like the United States has, observes Liel Leibovitz:

[E]ven though there have been no Newtown-style mass shootings in Israel, the Israeli government has tightened the reins over the past decade, passing a series of additional restrictions and placing further emphasis on enforcement. The result was clear: In 2000, there were approximately 400,000 legally owned firearms in Israel, the majority of them handguns, and the number of illegal weapons stood at about 150,000. Ten years later, thanks largely to the new strictures, the ratio was reversed: 180,000 firearms were legally licensed, and more than 400,000 were illegally obtained, most of them assault rifles like the M-16 and the Galil, stolen from the Israel Defense Forces. Naturally, this led to an increase in the number of casualties, as it placed far mightier tools in the hands of criminals who were previously content to handle their affairs using the perfectly legal and readily available guns at their disposal. […]

How, then, to explain Israel’s relatively low rate of gun-related deaths? For Lior Nedivi, an independent firearms examiner in Jerusalem and the co-author of a comprehensive report comparing Israel’s gun laws and culture to that of the United States, the answer lies far from the law books. “An armed society,” Nedivi wrote, quoting the science fiction writer Robert A. Heinlein, “is a polite society. Manners are good when one may have to back up his acts with his life.” It may be a bit odd to think of Israeli society as polite, but when it comes to guns it is, and for just the reason articulated by Heinlein: When everyone has a gun, guns are no longer seen as talismans by weak, frightened, and unstable men seeking a sense of self-validation, but as killing machines that are to be handled with the utmost caution and care. [Tablet, December 17]

Posted on 12/20/12 12:03 PM by Alex Adrianson

There Are Good Reasons that Some Civilians Want to Own a Gun

Guns in the hands of civilians save many lives every year, though it’s hard to say exactly how many. In their recent report on defensive gun use for the Cato Institute, Clayton Cramer and David Burnett identify a range of estimates of how often civilians use a gun in self-defense. It appears to happen at least 100,000 times per year. That’s the low end estimate, based on the reports of defensive gun uses by victims of crime. But how many defensive uses never get reported? Some studies put the real number of defensive uses per year in the millions. In any case, in the overwhelming majority of these cases, the civilians who use guns in self defense do so successfully.

Cramer and Burnett identified nearly 5,000 news stories about defensive uses of guns over an eight-year period, and in only 36 of those stories did a defender get killed by a criminal. In another 210 of those stories, a defender was shot but not killed. [“Tough Targets: When Criminals Face Armed Resistance from Citizens,” Cato Institute, February 2012.]

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

The President’s Tax Plan Would Not Be Good for the Economy

William Beach, John Ligon, and Guinevere Nell report the results of The Heritage Foundation’s macroeconomic simulations:

Relative to the economy’s performance under the current policy, we find that total output and income would decline by approximately $105 billion in 2012 and by an average of $196 billion per year over 2013–2022. The decline in economic output is consistent with prevalent recessionary concerns. The slowdown in real output occurs because:

• Higher tax rates on investment raise the cost of capital investment, and higher tax rates on labor income reduce the incentive to work and supply labor in the U.S. economy. Over the long run, the decline in private-sector investment would reduce the capital stock, leading to slower output and labor supply in the U.S. economy.

• Gross private-sector investment would decline by an average of $126 billion (4.1 percent) per year, reducing real capital stock in the U.S. economy by an average of $229 billion (1.2 percent) per year. The reduction in private-sector investment and capital services over the long run would reduce the labor supply at different economic margins: Private-sector employment in the U.S. economy would fall by an average 1.1 million jobs (1 percent) per year, and Americans would work 2 billion fewer hours relative to baseline levels.

The President believes his tax proposal will increase federal revenue by an average of $160 billion per year. The results of the dynamic simulation indicate that the President’s proposal would achieve only about $68 billion per year—less than one-half of the President’s projection. The dynamic result is due to a smaller tax base commensurate with the smaller economy. For example, fewer hours worked and lower real wages result in less federal income and payroll tax receipts. [The Heritage Foundation, December 14]

Posted on 12/20/12 11:08 AM by Alex Adrianson

The Problem Isn’t the Gun

A lot of opinions about guns and gun control are flying about in response to the mass shooting in Newtown, Conn., last Friday. David Kopel of the Independence Institute serves up some facts:

The 1980s were much worse than today in terms of overall violent crime, including gun homicide, but they were much better than today in terms of mass random shootings. The difference wasn’t that the 1980s had tougher controls on so-called “assault weapons.” No assault weapons law existed in the U.S. until California passed a ban in 1989.

Connecticut followed in 1993. None of the guns that the Newtown murderer used was an assault weapon under Connecticut law. This illustrates the uselessness of bans on so-called assault weapons, since those bans concentrate on guns’ cosmetics, such as whether the gun has a bayonet lug, rather than their function.

What some people call “assault weapons” function like every other normal firearm—they fire only one bullet each time the trigger is pressed. […]

[M]any of these attacks today unfortunately take place in pretend “gun-free zones,” such as schools, movie theaters and shopping malls. According to Ron Borsch’s study for the Force Science Research Center at Minnesota State University-Mankato, active shooters are different from the gangsters and other street toughs whom a police officer might engage in a gunfight. They are predominantly weaklings and cowards who crumble easily as soon as an armed person shows up.

The problem is that by the time the police arrive, lots of people are already dead. So when armed citizens are on the scene, many lives are saved. The media rarely mention the mass murders that were thwarted by armed citizens at the Shoney’s Restaurant in Anniston, Ala. (1991), the high school in Pearl, Miss. (1997), the middle-school dance in Edinboro, Penn. (1998), and the New Life Church in Colorado Springs, Colo. (2007), among others.

If we want explanations, Kopel suggests we stop obsessing about guns and examine the role of the media in turning mass shooters into celebrities and the deinstitutionalization of the violently mentally ill. [Wall Street Journal, December 17]

Posted on 12/20/12 10:45 AM by Alex Adrianson

Words of Which We Are Reminded This Week, Unfortunately

“Liberals claim to want to give a hearing to other views, but then are shocked and offended to discover that there are other views.”
—William F. Buckley Jr.

Posted on 12/20/12 10:16 AM by Alex Adrianson

Robert Bork, RIP

Robert Bork, who died Wednesday at the age of 85, was a leading intellectual figure in both the law-and-economics movement and the originalist school of constitutional interpretation. His scholarship showed how antitrust enforcement actually stifled competition to the detriment of consumers. Here are some comments from those who knew him.

Robert Alt, president of the Buckeye Institute, and a former intern under Robert Bork:

His work in antitrust law was so influential—it reshaped the way that the entire legal profession thought about the discipline, and his book The Antitrust Paradox was listed as one of the most significant books of the last century—that this accomplishment alone would have merited his inclusion in the list of modern legal luminaries.

Yet Judge Bork’s influence is far deeper and grander than a list of impressive titles. Not only was [he] a transformative figure in antitrust law, he was keeper of the flame of Originalist jurisprudence and a true defender of our Republic.

He defended this nation’s founding principles at a time when these principles came under such sustained assault that many a weaker man would have been tempted to disengage from the good fight. That he never did is a testament to his willpower, love of country, and understanding that it is only by clearly articulating our principles that we can hope to defend them. [Buckeye Institute, December 19]

Eugene Meyer, president of the Federalist Society:

The conservative movement has over the last quarter of a century changed the discourse in the country and countered the arid ideologies of the collectivists and Communists and other leftists. Judge Bork has played that role in our legal system. He was a legal giant; a man of unsurpassed integrity, intellect, courage, and wit. His efforts are far from having all borne fruit yet, but for years he was practically intellectually alone in upholding our constitutional principles. Consider his scholarship and his contribution to the debate and discussion throughout his years as a Yale law professor and well beyond; his service as solicitor general of the U.S.; his service as a U.S. Court of Appeals judge; his powerful works including The Tempting of America and Slouching Towards Gomorrah and The Antitrust Paradox; and his role as a mentor inspiring the best of the next generation in all of these positions. Taken together, these accomplishments show that no one has had more influence in supporting and sustaining the constitutional principles on which one can build a shining city on a hill. [National Review, December 19]

He also had a sense of humor. As Michael Greve remembers, Bork liked his martinis without olives. “If I want a salad, I’ll order one,” he once explained to a waitress. [Liberty Law Blog, December 19]

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

To Do: Discover What’s the Matter with Ohio

• Find out what’s gone wrong in Ohio. The Heritage Foundation will host Matt Mayer, author of Taxpayers Don’t Stand a Chance: Why Battleground Ohio Loses No Matter Who Wins (and What To Do About It). Mayer will speak at noon on December 17.

• Learn about entrepreneurial solutions to poverty by watching Poverty Cure’s new 6-part DVD series on the real sources of human flourishing.

• Watch these videos: Antony Davies demolishes the idea that higher tax rates will provide the government with more revenue. The Atlas Economic Research Foundation traces Chile’s economic revolution from the University of Chicago to implementation. Lanny Ebenstein identifies 20 of Milton Friedman’s greatest essays.

Posted on 12/14/12 05:28 PM by Alex Adrianson

Where the Tax Cut Expirations Will Hit Hardest

The ten metropolitan areas that will be hardest hit by the expiration of the Bush tax cuts all have relatively low household incomes, according to calculations by the Tax Foundation. In these metro areas, the median household incomes for a four-person family ranges from $36,104 in McAllen-Edinburg-Mission, Texas, to $43,838 in Danville, Va. But, there are also some high-income areas among the top 20, too, including San Franciso, Baltimore, Boston, and Washington, D.C. The least affected are the middle-income metropolitan areas. Check out the Tax Foundation’s full list to see where your city ranks.

Posted on 12/14/12 01:48 PM by Alex Adrianson

Silent Calvin Coolidge, 1924

Until we can reestablish a condition under which the earnings of the people can be kept by the people, we are bound to suffer a very severe and distinct curtailment of our liberty.

These results are not fanciful; they are not imaginary. They are grimly actual and real, reaching into every household in the land. They take from each home annually an average of over 300 dollars – and taxes must be paid. They are not a voluntary contribution to be met out of surplus earnings. They are a stern necessity. They come first.

It is only out of what is left, after they are paid, that the necessities of food, clothing, and shelter can be provided and the comforts of home secured, or the yearnings of the soul – for a broader and more abundant life gratified.

When the government affects a new economy, it grants everybody a life pension with which to raise the standard of existence. It increases the value of everybody’s property, raises the scale of everybody’s wages.

One of the greatest favors that can be bestowed upon the American people is economy in government. [Old Radio.org, February 12, 2012]

Posted on 12/14/12 01:27 PM by Alex Adrianson

Where Your Money Is Going

The real fiscal problem is federal spending on entitlements and debt service:

 

Posted on 12/14/12 12:56 PM by Alex Adrianson

The Plot Thins

The development of high school students’ analytic skills will suffer if the Common Core standards on literature are implemented, warns Sandra Stotsky. The problem, she explains, is that the standard writers have chosen to emphasize informational over classic literary texts:

[I]t is more than likely that college readiness will decrease when secondary English teachers begin to reduce the study of complex literary texts and literary traditions in order to prioritize informational or nonfiction texts. This is because, as ACT (a college entrance exam) found, complexity is laden with literary features: It involves characters, literary devices, tone, ambiguity, elaboration, structure, intricate language, and unclear intentions. By reducing literary study, Common Core decreases students’ opportunity to develop the analytical thinking once developed in just an elite group by the vocabulary, structure, style, ambiguity, point of view, figurative language, and irony in classic literary texts.

It will be hard to find informational texts with similar textual challenges (whether or not literary nonfiction). A volume published in 2011 by the National Council of Teachers of English on how English teachers might implement Common Core’s standards helps us to understand why. Among other things, it offers as examples of informational or nonfiction texts selections on computer geeks, fast food, teenage marketing, and the working poor. This is hardly the kind of material to exhibit ambiguity, subtlety, and irony. [The Heritage Foundation, December 11]

Posted on 12/14/12 12:55 PM by Alex Adrianson

There’s Another Government-Induced Bubble to Worry About

Higher education has a big debt problem, reports the New York Times. The story here is consistent with the theory that increases in student aid don’t help students, but rather are captured by colleges and universities. That theory holds that, because of the unique non-profit set-up of higher education, colleges and universities compete not to provide a better product but to increase their prestige:

Overall debt levels more than doubled from 2000 to 2011 at the more than 500 institutions rated by Moody’s, according to inflation-adjusted data compiled for The New York Times by the credit rating agency. In the same time, the amount of cash, pledged gifts and investments that colleges maintain declined more than 40 percent relative to the amount they owe. […]

The debate about indebtedness has focused on students and graduates who have borrowed tens of thousands of dollars and are struggling to keep up with their payments. Nearly one in every six borrowers with a student loan balance is in default.

But some colleges and universities have also borrowed heavily, spending money on vast expansions and amenities aimed at luring better students: student unions with movie theaters and wine bars; workout facilities with climbing walls and “lazy rivers”; and dormitories with single rooms and private baths. Spending on instruction has grown at a much slower pace, studies have shown. Students end up covering some, if not most, of the debt payments in the form of higher tuition, room and board and special assessments, while in some instances state taxpayers pick up the costs. […]

The pile of debt — $205 billion outstanding in 2011 at the colleges rated by Moody’s — comes at a time of increasing uncertainty in academia. After years of robust growth, enrollment is flat or declining at many institutions, particularly in the Northeast and Midwest. [New York Times, December 13]

Posted on 12/14/12 11:52 AM by Alex Adrianson

Competition from Indiana Pushed Michigan Gov. Snyder to Get Behind Right-to-Work

Reports Lachlan Markay:

“They did similar legislation back in February,” [Gov. Rick] Snyder said in a recent Fox News appearance. “They’ve seen thousands of jobs come to Indiana, and those jobs could also come to Michigan.” He might have added: instead of from Michigan.

“They’ve had 90 companies in the pipeline for economic development say this was a factor in deciding to look to come to Indiana,” Snyder said of the state’s right-to-work law at a news conference earlier this year, citing statistics from the Indiana Economic Development Corporation. “That’s thousands of jobs. We need more and better jobs in Michigan.”

According to IEDC, 67 planned projects in Indiana have reached the “pipeline stage,” and 31 companies have said they will move operations to the state, resulting in an estimated 3,700 new jobs and $431 million in investment. […]

“The state of Indiana and the local economic development folks have shown a willingness to do what is necessary to attract businesses to our state,” said Nick Busche, president and CEO of machine manufacturer Busche-CNC, which announced it would add 120 jobs at its Albion, IN, factory by 2015. “The recent passage of the right-to-work law was just another example of the strong commitment by this state to promote growth and job creation.” [The Foundry, December 12]

More competition between states, please.

Posted on 12/13/12 06:30 PM by Alex Adrianson

The Reason Some People Don’t Pay Their “Fair Share,” Isn’t Low Tax Rates

Rather, it’s because of all the handouts written into the tax code, observes Victor Davis Hanson:

Is Michael Moore (net worth: approximately $50 million) a one-tenth-of-one-percenter? If so, why do mansion-living-grandee movie directors like Moore and [Oliver] Stone need state subsidies and tax breaks to produce their films, when most states are nearly as insolvent as the federal government? […]

If the country is going to turn redistributionist, then we might as well do so whole-hog—given that eight of the wealthiest ten counties in America voted for Obama. Why not limit mortgage-interest deductions to just one loan under $100,000—while ending tax breaks altogether for second and third vacation houses?

Under the present system, the beleaguered 99 percent are subsidizing the abodes of Hollywood and Silicon Valley “millionaires and billionaires”—many of whom themselves have been railing against the 1 percent. Should the government provide tens of thousands of dollars in tax breaks for a blue-state 1-percenter to live in tony Palo Alto or Newport Beach when there are plenty of fine homes far cheaper and sitting empty not far away in Stockton and Bakersfield?

Blue states usually have far higher state income taxes that are used as deductions to reduce what is owed on federal income tax. Why should working folks in Nevada or Texas have to pay their fair share, while Wall Streeters get huge federal write-offs from their New York or Connecticut state income taxes? [National Review Online, December 13]

Posted on 12/13/12 06:16 PM by Alex Adrianson

Onto the List of Things Made Worse by Government, Add: Rock and Roll Hall of Fame

Rock and roll fans might be wondering this week how Randy Newman, Donna Summer, and Public Enemy have ended up in the Rock and Roll Hall of Fame. (At least Rush got in. Good to know there is a rock and roll wing in the Rock and Roll Hall of Fame!) One likely explanation is that the pursuit of continued government subsidies has corrupted the Hall’s judgment. The Chattanooga Times Free Press explains:

The building that houses the Rock and Roll Hall of Fame, a monstrous edifice on the shores of Lake Erie in Cleveland, cost taxpayers $65 million. According to IRS documents, in recent years, the Hall of Fame has snatched up as much as $2.8 million annually in public funds.

That need to keep cash rolling in is much of the reason the Hall of Fame has turned its efforts from highlighting and honoring the history of rock and roll to featuring a mishmash of whatever popular music will cause people to visit and pay attention to the Hall of Fame. The decision by the Hall of Fame to turn its back on its mission of educating “visitors, fans and scholars from around the world about the history and continuing significance of rock and roll music” has cost the organization both credibility and money.

When it was originally built, the Hall of Fame’s directors promised a million people through the door each year. In reality, the facility struggles to get 400,000 visitors annually. […]

By attempting to become everything to everyone, the Rock and Roll Hall of Fame has become nothing at all. What began as a grand effort to celebrate one of history’s most important cultural movements, is now a bland, passionless, disheartening money grab. In other words, the Rock and Roll Hall of Fame has become the antithesis of rock and roll. [The Chattanooga Times Free Press, December 13]

Posted on 12/13/12 05:59 PM by Alex Adrianson

Michigan’s Right-to-Work Law Didn’t Just Happen in the Past Week

The Mackinac Center began pushing for the reforms virtually from its founding in 1988 in Midland, Mich. In 1995, the group’s president and founder Lawrence Reed convinced the state’s largest daily to publish an op-ed promoting the idea. Reed wrote: “Michigan is overdue for a thoughtful consideration of fundamental labor law. Should workers be compelled to join a labor union to hold their jobs.” [Detroit Free Press, December 6, 1995]

Well, it took another 17 years, and a lot of observing other states move ahead with better policies. Today, Reed, who now heads up the Foundation for Economic Education, writes:

Many good people came to be involved, but no honest or thorough history of how Michigan ended the scourge of compulsory unionism can be told without citing the indispensable role of the Mackinac Center. I am immensely proud of that fact. We made the case for it when it was on no one’s radar. We produced studies, commentaries and lectures about the concept for two decades. We simply never gave up. When you know something is right, why would you?

One of the chief architects of our long-term strategy was my best friend and, before he died in a plane crash in June 2003, Mackinac’s senior vice president, Joe Overton. This great triumph for liberty is a tribute to him as much as it is to any person or any organization. Joe, we did it—just as you knew we would, sooner or later! [Mackinac Center, December 13, 2012]

Posted on 12/13/12 04:23 PM by Alex Adrianson

You Know You’ve Won When the Other Side Wants to Stop Keeping Score

The Internal Revenue Service is discontinuing a program that compiled data on the movement of taxpayers into and out of every county and state in the country, reports Jim Pettit [National Review Online, December 11]. It’s hard not to suspect that this kind of information is just too embarrassing to the high-tax, union-run blue states that keep losing people to the low-tax, right-to-work red states.

Posted on 12/12/12 05:02 PM by Alex Adrianson

Raising Tax Rates Won’t Do Much to Raise Revenues

But simplifying the tax code could raise revenues while also helping the economy.

Posted on 12/11/12 10:44 AM by Alex Adrianson

Will the ObamaCare Exchanges Be a Privacy Nightmare?

Be worried, say Stephen Parente and Paul Howard:

In order to determine eligibilty for health insurance subsidies, the new exchange has to bring together information about you and your family from the Treasury Department and IRS, the Department of Homeland Security, the Department of Justice, as well as your Social Security number — all coordinated by the Department of Health and Human Services. […] [T]he hub will have all the details needed to steal identities and fraudulently access credit. […]

According to an April RAND Corporation report, the feds might lose up to $98 billion annually to Medicare and Medicaid fraud and abuse, significant amounts of that related to the theft of personal information from government databases. And the political pressure to complete the hub before the exchanges begin enrolling applicants next fall will only add to the temptation to cut corners and declare success with a shoddy product not ready for prime time. [Green Bay Gazette, December 9]

Posted on 12/10/12 05:57 PM by Alex Adrianson

To Do: Remember What World II Veterans Sacrificed

Go see or request a screening for the new movie Honor Flight, a documentary about a project to thank World War II veterans by sending them on a trip to the World War II memorial in Washington, D.C.

• Discover how speech and behavior codes are trampling the civil liberties of college students around the country. At noon on December 11, the Cato Institute hosts Greg Lukianoff, President of the Foundation for Indivdual Rights in Education and author of the new book Unlearning Liberty.

• Learn how the filibuster is an essential check on overbearing majorities in the Senate. On December 11, at 11 a.m., The Heritage Foundation will host authors Richard Arenberg and Robert Dove.

Get activated with the new Heritage Action for America website, which now has more tools for getting involved in the fight for liberty.

See how well you know your economic freedom rankings. EconomicFreedom.org has an Economic Freedom Face-Off game.

• Check out these videos: EconStories has just released the greatest collection of economic hits ever aggregated; almost one year ago today, at a meeting of the Conservative Women’s Network at The Heritage Foundation, Sen. Jim DeMint (R-S.C.) laid out a game plan for championing conservative ideas.

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

Posted on 12/07/12 03:49 PM by Alex Adrianson

Sen. Jim DeMint, Ca. 2011

Almost one year ago today, at a meeting of the Conservative Women’s Network at The Heritage Foundation, Sen. Jim DeMint laid out a game plan for championing conservative ideas:

Posted on 12/07/12 03:20 PM by Alex Adrianson

Eldridge Cleaver Disagrees with Jason Whitlock

The sports columnist who this week said “I believe the NRA is the new KKK,” got his history a little backwards. From an insightful article from William Tonso:

[A]llied with sportsmen in vocal opposition to gun controls in the 1960s were the militant Black Panthers. Panther Minister of Information, Eldridge Cleaver noted in 1968: "Some very interesting laws are being passed. They don't name me; they don't say, take the guns away from the niggers. They say that people will no longer be allowed to have (guns). They don't pass these rules and these regulations specifically for black people, they have to pass them in a way that will take in everybody." […]

San Francisco civil-liberties attorney Don B. Kates, Jr. […] describes early gun control efforts in his book Restricting Handguns: The Liberal Skeptic Speak Out. As Kates documents, prohibitions against the sale of cheap handguns originated in the post-Civil War South. Small pistols selling for as little as 50 or 60 cents became available in the 1870s and '80s, and since they could be afforded by recently emancipated blacks and poor whites (whom agrarian agitators of the time were encouraging to ally for economic and political purposes), these guns constituted a significant threat to a southern establishment interested in maintaining the traditional structure.

Consequently, Kates notes, in 1870 Tennessee banned "selling all but 'the Army and Navy model' handgun, i.e., the most expensive one, which was beyond the means of most blacks and laboring people." In 1881, Arkansas enacted an almost identical ban on the sale of cheap revolvers, while in 1902, South Carolina banned the sale of handguns to all but "sheriffs and their special deputies—i.e., company goons and the KKK." In 1893 and 1907, respectively, Alabama and Texas attempted to put handguns out of the reach of blacks and poor whites through "extremely heavy business and/or transactional taxes" on the sale of such weapons. [Reason, December 1985, as reproduced at GunCite.com]

Posted on 12/07/12 01:56 PM by Alex Adrianson

Health and Safety Regulations Represent Trade-Offs that Make Sense to the Wealthy

… but not necessarily the poor, finds a new study by Diana Thomas:

Well-intentioned regulation often represents the preferences of the wealthy by regulating otherwise negligible risks. By driving up prices for all consumers, such regulation is likely to have disproportionately negative or regressive effects on the poor. This study shows that compared to potential private risk-reduction strategies, regulation tends to target low risks that are extremely expensive to mitigate. Such regulations, therefore, represent the preferences of the wealthy and come at the expense of low-income households.

The 36 different regulations included in this rough estimation of the cost and benefits of public risk-mitigation strategies resulted in a total reduction in the risk of a fatality of 0.18 in 10,000 of population and cost approximately $604 per household, which translates to $3,359 for a 1 in 10,000 reduction in mortality. In contrast, the private risk-reduction strategy of moving to a high-income neighborhood would reduce mortality risk by roughly 8.3 in 10,000 people for adult mortality risks and by 1 in 10,000 for pediatric injury risk. Such private risk-reduction costs a total of $6,000 per household, which translates into a cost of $645.16 for a mortality risk reduction of 1 in 10,000 people. In consequence, having to pay for small risk reductions through regulation may prevent low-income households from taking more beneficial private risk reduction strategies that would result in a greater reduction in mortality. [“The Regressive Effects of Regulation,” Mercatus Center, November 12]

Posted on 12/07/12 12:31 PM by Alex Adrianson

One Little Noted Reason Twinkie Production Is Moving to Mexico

Protectionism. Bryan Riley:

According to the U.S. Department of Agriculture’s Economic Research Service, “U.S. sugar prices have been well above world prices since 1982 because the U.S. Government supports domestic sugar prices through loans to sugar processors and a marketing allotment program.”

The U.S. government artificially inflates sugar prices to help sugar growers by imposing quotas that restrict the amount food manufacturers and consumers in the United States can buy from producers in other countries. If a bakery or a candy company wants to import more sugar than is allowed under the government’s quota, it must pay a prohibitive tariff of 15.36 cents per pound for raw sugar.

In October, sugar cost 52.54 cents per pound in the United States and 44.78 cents per pound in other countries. The difference between 52.54 cents and 44.78 cents is not “zero.”

In October, people in the United States paid 7.76 cents per pound extra for sugar, but the “no-cost” sugar program usually costs Americans even more. Over the past 12 months, Americans paid a big surcharge for sugar. The average price of sugar in the United States was 68.95 cents per pound, 41 percent above the world market price. [Internal citations omitted.] [The Heritage Foundation, December 5]

Posted on 12/07/12 12:19 PM by Alex Adrianson

Voting with Feet

Top five shrinking states, according to ResidencyHQ: Illinois, New York, California, New Jersey, Ohio. [Fiscal Times, November 28]

Where those states rank in the Tax Foundation’s 2013 State Business Tax Climate Index: Illinois, 29; New York, 50; California, 48; New Jersey, 49, Ohio, 39.

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

Restaurants and Food Trucks—Two Flavors that Go Together

Food trucks—the target of much regulation designed to protect restaurants from competition—are good for a city’s restaurant scene, and even established restaurants are starting to see they benefit, too, report Bert Gall and Lancee Kurcab:

Austin’s food trucks and food trailers are a rising tide lifting all boats in the local restaurant industry; one way they have done so is by attracting more people—both new residents and tourists—into the city. In Houston, restaurants have experienced increased business generated by food trucks parking nearby and drawing more people to the restaurants’ neighborhoods. It is for this reason that restaurant owners have asked the Houston City Council to ease existing laws that make it difficult for food trucks to operate. And in Las Vegas, George Harris, the owner of Mundo, an award-winning upscale restaurant in Las Vegas, has observed that food trucks help his business by bringing new customers to the neighborhood.

Furthermore, historical evidence suggests that banning food trucks from an area in which they currently operate will harm nearby restaurants by decreasing the number of potential customers. For example, when street vendors were banned from New York’s Lower East Side and Chicago’s Maxwell Street Market, brick-and-mortar businesses complained that they suffered lower revenues as a result.

Simply put, food trucks draw people out of their offices and homes and into the community, opening their eyes to all of the meal options their neighborhood has to offer.

As Gall and Kurcab observe, there’s nothing unfair about using a different business model, as long as everyone is free to use whatever business model he wants. Restaurants, in fact, are using food trucks, too:

All over the country, restaurant owners are launching their own food trucks. For example, the owners of Curried, an Indian restaurant in Chicago, started a food truck with the same name in order to better market the restaurant. Mission accomplished: “We’ve definitely seen an increase in business at the restaurant,” says Scott Gregerson, Curried’s managing partner. Jose Hernandez, general manager at POPS Cheesestakes in Las Vegas, says that the business at the restaurant’s physical location has been boosted by the restaurant’s food truck: “The truck has been great advertising.” [“Seven Myths and Realities about Food Trucks: Why the Facts Support Food Truck Freedom,” Institute for Justice, November 2012]

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

Sen. Jim DeMint Thinks He Can Be More Effective on the Outside

On Thursday, Sen. Jim DeMint (R-S.C.) announced he intends to resign from the Senate to become the next president of The Heritage Foundation. He explained the decision:

I think I can do a lot to support these conservatives inside the Senate and the House [by] working with the Heritage Foundation all over the country to convince Americans that our policies are the best for them. […] One hundred percent of Americans, whether they’re poor or rich – the conservative ideas will make the lives of Americans better. And Heritage has the platform for me to help spread that idea. […]

In the Senate, a lot of my role has been trying to stop bad legislation and explaining to America why the policies of the Obama administration and the Democratic Party are not good for them. […] And that’s an important role. But after spending most of my life in advertising and marketing and research, I know that we can do a whole lot better job of convincing the American people, winning their hearts and souls. If we do that, then we are going to be more effective inside of Congress and more effective at election time. [Remarks on Rush Limbaugh’s radio show, as quoted by Huffington Post, December 6]

Posted on 12/06/12 04:46 PM by Alex Adrianson

Hark, I Hear a Fallacy

The greatest collection of economic holiday hits ever aggregated:

Posted on 12/06/12 04:29 PM by Alex Adrianson

Workplace Freedom Can Help Michigan, Too

Michigan is poised to become the 24th right-to-work state, now that Gov. Rick Snyder has announced he will sign a right-to-work bill if it reaches his desk. Right-to-work laws prevent unions from forcing people to pay union dues as a condition of employment. They also bring jobs and growth, observes Michael LaFaive:

Of the nine states that saw the greatest population growth in that decade, six have a right-to-work law and a seventh — Colorado — enjoyed a quasi-RTW status thanks to its “labor peace act,” which makes it difficult for unions to extract fee payments from non-members in a workplace. (Right-to-work laws do not affect collective bargaining, other than to prohibit labor contracts that make union dues or fees a condition of employment.)

To be sure, many factors go into individual migration decisions (high growth states also have more days of sunshine than Michigan, for example), but scholarly studies of the issue using sophisticated statistical techniques to isolate the different factors nevertheless suggest that having right-to-work protections for employees has a positive impact on a state’s in-bound migration.

For example, a 2010 study by Mackinac Center for Public Policy adjunct scholar Richard Vedder examined other possible explanations including climate, taxes, population and the “occupational composition of the workforce,” and still concluded, “Without exception, in all the estimations, a statistically significant positive relationship … was observed between the presence of right-to-work laws and net migration.” Mackinac Center analyses of Michigan migration also discovered a “revealed preference” for right-to-work states.

My colleague James Hohman reports that from 2000 to 2009, right-to-work states gained nearly 5 million people from non-right-to-work states. From Census to Census, right-to-work states grew by 15.5 percent, while non-right-to-work states grew by only 6.1 percent. [Mackinac Center, December 5]

Posted on 12/06/12 03:46 PM by Alex Adrianson

Make ’Em Earn Their Keep

States don’t need more federal aid to maintain their payrolls. They just need workers who can put in a 40-hour week. Jason Richwine and Andrew Biggs look at the Census Bureau’s American Time Use Survey:

What we found was that during a typical workweek, private-sector employees work about 41.4 hours. Federal workers, by contrast, put in 38.7 hours, and state and local government employees work 38.1 hours. In a calendar year, private-sector employees work the equivalent of 3.8 more 40-hour workweeks than federal employees and 4.7 more weeks than state and local government workers. Put another way, private employees spend around an extra month working each year compared with public employees. If the public sector worked that additional month, governments could theoretically save around $130 billion in annual labor costs without reducing services.

We’ve excluded teachers from the full-year comparison because of their naturally shorter work year. But could public-private differences in work time be due to other occupational differences between the sectors? Large differences in work hours actually persist even when comparing workers with similar jobs and similar skills in each sector.

Based on the most detailed and objective data set available, the private sector really does work more than the public sector. This fact may hold different lessons for different people, but our own take is simple: Before we ask private-sector employees to work more to support government, government itself should work as much as the private sector. [Wall Street Journal, December 4]

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

President Obama’s Data Contradict His Story on the Bush Tax Cuts

The chart below, based on Barack Obama’s own 2012 Economic Report of the President, show the Bush tax cuts are not the cause of the deficit.

[Investor’s Business Daily, November 30]

Posted on 12/04/12 06:39 PM by Alex Adrianson

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