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InsiderOnline Blog: December 2013

To Do: Get Ready for 2014

Put these events for the first three months of next year on your calendar. They’re kind of a big deal, conservative-movement-wise.

12th Annual Texas Public Policy Foundation Policy Orientation for the Texas Legislature, January 9 – 11, Austin, Texas
March for Life, January 22, Washington, D.C.
National School Choice Week, January 26, nationwide
Educational Policy Conference 25, January 30, St. Louis
International Students for Liberty Conference, February 14 – 16, Washington, D.C.
Western Conservative Conference, February 21 – 22, Phoenix
• Weyrich Awards Dinner, March 5, Washington, D.C.
Conservative Political Action Conference (CPAC), March 6 – 8, Washington, D.C.
Federalist Society National Student Symposium, March 7 – 8, Gainesville, Fla.
Young Conservative Coalition Reaganpalooza, March 8, Washington, D.C.
Susan B. Anthony List Gala, March 12, Washington, D.C.
Young America’s Foundation High School Conference at the Reagan Ranch, March 20 – 22, Santa Barbara, Calif.
The Heritage Foundation Resource Bank Meeting, March 26 – 28, New Orleans

Posted on 12/21/13 12:08 AM by Alex Adrianson

Our Ten Most-Clicked Publications from 2013

We sent out 48 e-mails last year (not counting this week’s). In all, we rounded up exactly 2,045 conservative and free market publications on public policy in 2013. Here are our ten most publications from the year, counting down from number 10:

10. “A Candid Look at Common Core,” by Vicki E. Alger, Independent Women’s Forum, November 18;
9. “35 Years after Prop 13, Has It Worked?” by Benjamin Zycher, American Enterprise Institute, July 15;
8. “Calling the Keynesians’ Bluff,” by Nathan Smith, American Enterprise Institute, February 1;
7. “What Happens During a Government Shut Down?” by Hans von Spakovsky, The Heritage Foundation, September 18;
6. “The Debt Limit Debate 2013: Addressing Key Myths,” by Veronique de Rugy and Jason J. Fichtner, Mercatus Center, October 10;
5. “The Real Reasons We Have a Public Pension Crisis,” by Caleb O. Brown, American Enterprise Institute, October 23;
4. “The President’s Legal Authority at the Debt Limit,” by Andrew Kloster, The Heritage Foundation, October 9;
3. “A Farm Bill Primer: 10 Things You Should Know About the Farm Bill,” by Daren Bakst and Diane Katz, The Heritage Foundation, May 14;
2. “The Government Scandal (You Haven’t Heard Of),” by Clint Bolick, Hoover Institution, July 11;
1. “A ‘Genius’ Way to Avoid Taxes,” by Aparna Mathur, American Enterprise Institute, April 14.

Noting that the folks at AEI got four of the top ten here, we’d have to say that at the very least they have a genius way of writing titles.

Posted on 12/20/13 11:25 PM by Alex Adrianson

So far Religious Liberty Is Winning in the Lower Courts

This week, courts issued two more rulings against the Department of Health and Human Services abortion/contraception mandate. First, on Monday, six non-profits affiliated with the Roman Catholic Archdiocese of New York won permanent injunctive relief from the U.S. District Court for the Eastern District of New York.

Second, on Friday, two religious nonprofits associated with the Southern Baptist Convention won preliminary injunctive relief from the U.S. District Court for the Western District of Oklahoma.

So far, according to the Becket Fund’s HHS Mandate Information Central tracker, on rulings that have reached the merits—as opposed to procedural issues—33 out of 39 for-profit plaintiffs have been granted injunctions (meaning the companies don’t have to comply with the rule) while six out of seven non-profit plaintiffs have been granted injunctions. The Supreme Court will hear two of these cases next year. The company Hobby Lobby won its challenge to the mandate in 10th U.S. Circuit Court of Appeals, while Conestoga Wood Specialties lost in the 3rd U.S. Circuit Court of Appeals.

Posted on 12/20/13 10:10 PM by Alex Adrianson

There Was a Much Easier Way to Exempt People from the Hardship of ObamaCare

You can’t change ObamaCare because it’s the law! That, or something along those lines, was the pro-ObamaCare talking point earlier this year. But this week, the Obama administration changed the law again through executive fiat, this time announcing that the individual mandate won’t apply to people who can no longer afford health insurance because of ObamaCare. Of course, the administration is purporting not rewrite the law. How so? There is, in the original legislation, a hardship exception to the individual mandate. The Wall Street Journal details what happened this week:

These exemptions were supposed to go only to the truly destitute such as the homeless, bankrupts or victims of domestic violence. But this week a group of six endangered Senate Democrats importuned HHS Secretary Kathleen Sebelius to “clarify” that the victims of ObamaCare also qualify. An excerpt from their Wednesday letter, whose signatories include New Hampshire’s Jeanne Shaheen and Virginia’s Mark Warner, is nearby.

HHS and the Senators must have coordinated in advance because literally overnight HHS rushed out a bulletin noting that exemptions are available to those who “experienced financial or domestic circumstances, including an unexpected natural or human-caused event, such that he or she had a significant, unexpected increase in essential expenses that prevented him or her from obtaining coverage under a qualified health plan.” A tornado destroys the neighborhood or ObamaCare blows up the individual insurance market, what’s the difference?

The HHS ruling is that ObamaCare is precisely such a “significant, unexpected increase.” In other words, it is an admission that rate shock is real and the mandates drive up costs well into hardship territory. [Wall Street Journal, December 20]

Changing laws to fix problems is one thing. But ad hoc shifting of rules by reinterpreting the meaning of written law will create a lot more uncertainty. And more uncertainty will make it even harder for markets to work, as Alyene Senger and Robert Moffit explain:

Rest assured it is going to create even greater confusion for health insurers trying to sell these products. Also, don’t expect the unhappy consumers who’ve just lost their previous coverage to understand clearly which plan they can pick and be legally qualified to pick it.

Following the numerous administrative delays, modifications, and even suspensions of statutory law, the Administration’s latest feckless attempt to fix what the Administration has broken fits a pattern. At heart, Obamacare is largely a vast grant of decision-making authority to the Secretary of HHS, who can make and unmake rules at her pleasure and even be “creative” with the law.

What’s next? Who knows? When the broad and vague statutory language of the health law is no sure guide, one’s only recourse is to read—carefully—the fine print of the regulations. But they are always subject to change. Whether you own a small business or run a medical practice, an insurance company, or a hospital, it is hard to plan or prepare. Now ordinary Americans also know this disheartening feeling. [The Foundry, December 20]

If you signed up because you thought you had to even though you didn’t really want to, you might feel as if someone has lied to you.

Posted on 12/20/13 09:37 PM by Alex Adrianson

Getting People to Buy Stuff They Don’t Want Isn’t Easy

ObamaCare was supposed to reduce the number of the uninsured. However, it may end up being the case that taking away plans that people liked in order to force them to buy insurance that government bureaucrats think is better does not lead to more people having insurance. Here is what insurance industry expert Bob Laszewski tells John McCormack:

I was out making some client calls this week with a number of different carriers and they know exactly how many policies they canceled and how many who reupped. And they know how many people have come in through the exchange. And I didn’t find one of them who thought they were going to be net ahead on January 1. They all think they’re going to net behind on January 1. [Weekly Standard, December 13]

That could produce another unanticipated problem, notes Megan McArdle:

A lot of these insurance pools are already pretty small. If enrollment is much lower than expected, many markets may not have enough customers to make a viable pool. Even if the insurance pool isn’t older and sicker than expected, a pool that is too small can be wiped out by a couple of unlucky and expensive illnesses. [Bloomberg, December 17]

Posted on 12/20/13 08:56 PM by Alex Adrianson

Lobbying Pays

Maybe you’ll drive to be with family on Christmas. If so, you will pay more because of the ethanol lobby’s influence. Rich Tucker explains:

Until 2012, the federal government provided generous tax credits to refiners that blended ethanol into gasoline. In 2011 alone, Washington spent $6 billion on this credit. The federal government also maintains tariffs (54 cents per gallon) to keep out foreign ethanol, and it mandates that tens of billions of gallons of ethanol be blended into the American gasoline supply. Nothing like a federal mandate to create demand for your product.

How much would you pay for billions of dollars worth of largesse? Well, the ethanol industry got a steep discount. In 2012, says, the American Coalition for Ethanol spent $212,216 on lobbying. To be fair, that’s down a bit from previous years. And there are, no doubt, other lobbying efforts going on, including direct campaign contributions. [Real Clear Politics, December 19]

Or maybe you’ll eat some sweets at Christmas. If so, you will pay more because of the sugar lobby and its influence. Again, Rich Tucker explains:

[Sugar growers] spent about $50 million on federal campaign donations over the last five years. So that would average out to $10 million per year. Last year alone, the federal government spent $278 million on direct expenditures to sugar companies. That’s a great return on investment.

Here’s what the sugar growers are buying: Federal tariffs make it expensive to import sugar, which is supposed to protect the domestic sugar industry. Meanwhile, the federal government gives sugar growers a price floor. If prices drop, the federal government will buy the product at above-market prices. The 4,500 sugar farmers in the U.S. simply cannot lose.

But the rest of us, those who eat, bake, and pay taxes, lose big. This year, Washington’s sugar policy cost consumers $826,000 for each sugar-production job saved, according to a recent Department of Commerce report. That’s a heavy price for all of us to pay. Meanwhile, tariffs have driven many candy makers overseas. [Real Clear Politics, December 19]

Posted on 12/20/13 08:55 PM by Alex Adrianson

Homeschooling without Social Workers’ Permission Is Still Legal in Ohio

Thanks to grassroots mobilization, notes Paula Bolyard, a victory for homeschoolers in Ohio:

The bill, named Teddy’s Law for 14-year-old Teddy Tedesco who was brutally tortured and murdered by his mother’s boyfriend, would require all homeschooling families to submit to background checks and interviews with social workers before being permitted to homeschool or enroll in an online school in the state. Parents and children would be separated for interviews and any finding by a social worker that homeschooling was not “in the best interest of the child” would be grounds for denial of the right to homeschool or enroll in an online school. […]

Ohioans for Educational Freedom (OEF), a statewide PAC that supports homeschooling, began telling Ohio homeschoolers and other supporters of freedom in education about the bill at 10:35 p.m. on Monday night. By Thursday afternoon the bill was dead. [PJ Media, December 20]

Posted on 12/20/13 08:55 PM by Alex Adrianson

Climate Change Is Now Wreaking Havoc on Global Warming Reports

We’re now 15 years into a period of non-rising global surface temperatures, which is making it tough for the United Nations’ Intergovernmental Panel on Climate Change to write its annual reports. Ron Bailey delves into the IPCC’s report from September:

The IPCC report obliquely refers to an August study in the journal Nature Climate Change finding that the observed rate of warming during the last 20 years was half of what a representative sample of the models relied upon by the IPCC projected. Looking at just the last 15 years, the models were four times hotter than the actual trend in the average global temperature.

But the IPCC is confident that warming will soon resume at a pretty fast clip. Back in 2007, other modelers were similarly confident about their forecasts for future warming. At the U.N.’s annual climate change conference in Bali, the U.K.’s Hadley Centre predicted that between 2004 and 2014 the global average temperature would rise by around 0.3 degree Celsius. Instead, the Nature Climate Change article reports, the trend during the last 15 years has amounted to an increase of just 0.05 degree Celsius per decade—one-sixth the Hadley Centre’s predicted rise.

The Hadley Centre also predicted that half of the years after 2009 would be hotter than the record year at the time, 1998. So far, judging from the Hadley Centre’s latest data, which were adjusted upward last year, only one year after 2009 has been hotter than 1998, and then only by 0.02 degree. […]

By failing to predict a flat 15-year period, the U.N.’s new report does not inspire the kind of confidence that could justify a trillion-dollar climate policy bet. [Reason, January 2014]

Posted on 12/20/13 08:05 PM by Alex Adrianson

What Happens When You Give Workers a Choice?

Nearly one in five Wisconsin school district unions lost in certification elections held between November 29 and December 19, reports MacIver News. In 2011, Wisconsin’s Act 10—the bill that thousands of teachers protested by taking time off from teaching in order to crowd into the Wisconsin State Capitol—limited the wage increases that could be achieved via collective bargaining, prohibited employers from collecting union dues, and made the payment of union dues no longer a condition of employment for most public sector employees. The bill also required public sector unions to certify every year. Eighty-one out of 408 school district unions that applied for certification failed to win certification. Nearly 17,000 teachers either voted no or declined to vote at all in the election, which requires a union to win 51 percent support in order to be certified. [MacIver Institute, December 19; and MacIver Institute, December 20]

Posted on 12/20/13 07:28 PM by Alex Adrianson

The Things People Know that Just Aren’t So

Voters are woefully misinformed about public policy issues, according to a recent poll by the Just Facts Foundation.

Most voters, for example, seem to think the tax code sticks it to the little guy while letting the fats cats slide. According to the poll, only 4 percent of Democratic voters and 31 percent of Republican voters know that the top 1 percent of income earners pay a higher federal tax rate than the middle class. According to the Congressional Budget Office, the top 1 percent pays an average federal tax rate of 29.4 percent. Meanwhile, the 20 percent of taxpayers exactly in the middle of the income distribution pay only 11.5 percent. [See: “The Distribution of Household Income and Federal Taxes, 2010,” Congressional Budget Office, December 2013]

Voters, especially Democrats, are also confused about how much of the federal budget is devoted to defense spending. The poll found that only 18 percent of Democratic voters and 58 percent of Republican voters know that the federal government spends more money on social programs than on national defense. In fact, roughly 60 percent of federal spending goes to social programs, and only about 20 percent goes to national defense. [See: “National Debt Facts,” by James D. Agresti. Just Facts Foundation, April 26, 2011, updated December 2, 2013]

One more finding: Voters in both parties significantly overestimate how big a problem hunger is. The poll found that only 6 percent of Democratic voters and only 13 percent of Republican voters know that on an average day in America, less than 1 percent of households with children have even one child who experiences hunger. The precise figure, according to the U.S. Census Bureau is 0.18 percent. [See: “Hunger Games: Reporters and Pundits Greatly Exaggerate Hunger in America,” by James D. Agresti, Just Facts Daily, April 11, 2013]

Based on these three questions alone, there would appear to be a lot of low-hanging fruit for conservatives working to educate the public about issues like inequality, federal spending, and poverty. For the results for 16 other questions, see “Poll Reveals Voters Misinformed about Key Issues,” by James D. Agresti, Just Facts Daily, December 20.

Posted on 12/20/13 06:14 PM by Alex Adrianson

Words to Remember

[T]hough socialism has been generally abandoned as a goal to be deliberately striven for, it is by no means certain that we shall not still establish it, albeit unintentionally. The reformers who confine themselves to whatever methods appear to be the most effective for their particular purposes and pay no attention to what is necessary to preserve an effective market mechanism are likely to be led to impose more and more social control over economic decisions (though private property may be preserved in name) until we get that very system of central planning which few now consciously wish to see established.
—Friedrich Hayek, The Constitution of Liberty, 1960 [h/t: Alberto Mingardi at Econlog, December 19]

Posted on 12/20/13 03:47 PM by Alex Adrianson

High Taxes Indeed

This year, capital gains were subject to a 23.8 percent tax rate. The capital gains tax had been only 15 percent. You can thank ObamaCare for 3.8 points of that 8.8 percentage point increase. But however high the statutory rate is, the real rate of taxation on capital gains is almost always higher. The reason for that is that the tax is applied to the nominal gains from the sale of an asset, not the inflation-adjusted gain. For some capital gains taxpayers, the rate can be quite high. Check out this calculation produced by John Aldridge and Kyle Pomerleau:

As you can see from the chart, stocks bought in 1999, 2000, and 2007 and sold in 2013 have an infinite effective rate of taxation, because the gains in price are entirely caused by inflation. As Aldridge and Pomerleau note, the capital gains tax “creates a bias against savings, slows economic growth, and places a double-tax on corporate profits.” Repealing the tax entirely would be the best policy for the economy. Short of that, indexing gains to inflation for tax purposes would at least prevent the situation where some taxpayers pay a tax on no gain at all. [Tax Foundation, December 17]

Posted on 12/19/13 06:53 PM by Alex Adrianson

To Do: Give Enlightenment and Get Enlightenment

• Get your Christmas shopping done. We suggest books, which are a sure way to enlighten your family members. Either that or provoke them. Here are 12 good ones published in the past year:
 The Great Debate: Edmund Burke, Thomas Paine, and the Birth of Right and Left
by Yuval Levin, Basic Books;
Gun Control in the Third Reich: Disarming the Jews and “Enemies of the State” by Stephen P. Halbrook, Independent Institute;
The End Is Near and It’s Going to Be Awesome: How Going Broke Will Leave America Richer, Happier, and More Secure by Kevin D. Williamson, HarperCollins;
Inventing Freedom: How the English-Speaking Peoples Made the Modern World by Daniel Hannan, HarperCollins;
Unintimidated: A Governor’s Story and a Nation’s Challenge by Scott Walker and Marc Thiessen, Penguin;
The Food Police: A Well-Fed Manifesto About the Politics of Your Plate by Jayson Lusk, Random House;
 Rebound: Getting America Back to Great by Kim Holmes, Rowman & Littlefield;
Sagebrush Rebel: Reagan’s Battle with Environmental Extremists and Why It Matters Today by William Perry Pendley, Regnery;
Rise of the Warrior Cop: The Militarization of America’s Police Forces by Radley Balko, Public Affairs;
The Classical Liberal Constitution: The Uncertain Quest for Limited Government by Richard A. Epstein, Harvard University Press;
The Truth About the IRS Scandals by Charles C. Johnson, Encounter Books;
Conservative Internationalism: Armed Diplomacy under Jefferson, Polk, Truman, and Reagan by Henry R. Nau, Princeton University Press.

• Find out how smart you really are by checking out the Fact App, a new feature from the Just Facts Foundation. The app asks a stumper about government and society every day, and then provides the answers along with supporting documentation. Not only can you get the app for your iPhone; you can also embed it on your own website.

Raise your game by signing up for Think Tank 101, a five-lesson online course from the Atlas Economic Research Foundation. Each interactive lesson will challenge you to develop and use new skills to move your think tank forward. You can choose from six different session times, four in English and two in Spanish.

• High school history and social studies teachers, save your spot to learn about “America and Modern War.” The Foreign Policy Research Institute will host a conference on the topic in Wheaton, Illinois. The conference will be April 26 and 27, 2014. Apply by January 31, 2014 by sending to your resume and a short statement describing your current teaching or professional assignments, your reasons for wanting to attend, and how your students or school district will benefit from your participation.

• Save the date: The Texas Public Policy Foundation will host its 12th Annual Policy Orientation for the Texas Legislature and Visionaries Meeting from January 8 to January 10, 2014. The conference will be held at the Sheraton Austin at the Capitol in Austin, Texas. There are two reasons to attend. The first is that it’s the premier event previewing the next legislative session in this large state that serves as a model for free market policy reform and dynamic economic growth. The second is that Mike Ditka will be there.

Posted on 12/14/13 01:53 AM by Alex Adrianson

The House Wants to Raise Taxes that It Doesn’t Want to Call Taxes

Rob Bluey details the sneaky tax increase in the budget passed by the House of Representatives this week:

Travelers are currently charged $2.50 per flight under the Transportation Security Administration’s airline security “fee.” Under the budget deal, that would increase to $5.60 per flight or $11.20 for a round-trip ticket.

Supporters of the deal are claiming this isn’t a tax increase—but take a look at your airline receipt. The airline security charge is just one of the taxes you’ll see. According to Delta Airlines, there’s also the Domestic Transportation Tax (7.5 percent), Travel Facilities Tax ($8.40), and U.S. International Transportation Tax ($17.20). These are all considered taxes. […]

And in the case of this airline security fee increase, the money isn’t even going back to the TSA to fund or improve security. Instead, as Heritage’s Cassandra Lucaccioni explained, “it will be deposited annually into a general fund of the Treasury.” [The Foundry, December 13]

Posted on 12/14/13 01:11 AM by Alex Adrianson

Welcome to the Machine

ObamaCare needs young and health people to sign up in order for the individual insurance market to avoid a death spiral. So hurry up and sign up already! Oh wait:

Minnesota and seven other state Obama exchanges are vulnerable to a certain cyberattack that can reveal customers’ usernames and passwords, according to a local ABC News affiliate report.

Minnesota Obamacare exchange MNsure failed in a simulated WiFi attack by tech firm Computer Forensic Services, along with seven out of 12 other exchanges tested.

Even—which technology experts have alleged is incredibly unsafe—is “coded much more securely than the MNsure webpage is,” according to Mark Lanterman, of Minnesota tech firm Computer Forensic Services.

“MNsure is vulnerable to a type of WiFi attack where hackers can intercept user names and passwords,” Minnesota ABC local reported.

Of the 12 other state exchanges Lanterman tested for the WiFi weakness, 7 failed. Maryland, Colorado, D.C., Hawaii, Nevada, New Mexico and New York are also vulnerable to the same type of attacks, the study found. [Daily Caller, December 11]

If only we had some kind of system where people had choices and didn’t all have to rely on just one website.

Posted on 12/14/13 12:11 AM by Alex Adrianson

Should We Soak the Rich?

First, we should figure out whether we already are. That, as Curtis Dubay notes, is what the CBO recently did:

According to CBO, the top 1 percent of income earners—families earning more than $613,700 in 2010 (the latest year of available data)—paid an effective tax rate on all federal taxes of 29.4 percent. They paid 24.2 percent of all federal taxes while earning just under 15 percent of all income.

The middle class—families earning more than $71,400—paid an effective tax rate of 11.5 percent. They paid 9.1 percent of all federal taxes and earned 14.2 percent of income.

CBO also estimated that the top 1 percent will pay 33.6 percent of their income in federal taxes this year—well above what the Buffett Rule calls for.

As a result of the President’s policies, the top 1 percent of income earners will pay four percentage points more of their income in federal taxes in 2013 than they did in 2010—before the President signed his long-sought tax hikes into law. That is a 14 percent increase in their effective tax rate. [The Foundry, December 12; see also “The Distribution of Household Income and Federal Taxes, 2010,” The Congressional Budget Office, December 2013]

Two questions for liberals: 1. How much redistribution is enough? Until nobody makes more than the next guy? 2. How much future economic growth are you willing to sacrifice in order to make everybody more equal today? As Dubay notes, using the tax code to redistribute income reduces the incentives to engage in productive activity, which in the long run makes us all poorer.

Posted on 12/13/13 11:42 PM by Alex Adrianson

The House Wants to Increase Spending While Claiming to Cut It

It’s the usual stupid Congress tricks—cutting spending in 2022 and 2023 so that current members of Congress can increase spending today. Which future members of Congress agreed to that plan, and when can we vote them out? Chris Edwards reviews the budget passed this week by the House:

Republican leaders reached a discretionary spending deal with the Democrats for 2014 and 2015 that blows up the 2011 Budget Control Act. That Act had been the GOP’s only major spending accomplishment in years.

The 2011 Act and related sequester have been bearing fruit and providing discretionary spending control the last two years. Now Republican leaders are throwing it away in return for revenue increases and spending trims that are mainly tiny and phony. The largest trim is a health care provider reduction that is supposed to take place a decade from now. Why should anyone consider that a real cut given that party leaders showed with this deal that they could not even stick to the BCA cuts for more than two years?

Before the new agreement, current law set discretionary spending at $967 billion in 2014. The new budget deal would raise that cap to $1.012 trillion, which is a spending hike of $45 billion. [The Cato Institute, December 11]

Posted on 12/13/13 11:11 PM by Alex Adrianson

PolitiFact’s Lie of the Year Feature Is Only Half True

On Thursday, the Tampa Bay Times’ gave President Obama a distinction he’s probably not going to place on his shelf next to his Nobel Peace Prize:

Boiling down the complicated health care law to a soundbite proved treacherous, even for its promoter-in-chief. Obama and his team made matters worse, suggesting they had been misunderstood all along. The stunning political uproar led to this: a rare presidential apology.

For all of these reasons, PolitiFact has named “If you like your health care plan, you can keep it,” the Lie of the Year for 2013. [PolitiFact, December 12]

Hold on a minute. ObamaCare was passed in March 2010, and the President has been repeating the “if you like it, you can keep it” claim ever since. Shouldn’t it be called the Lie of the Year for 2010, 2011, 2012, and 2013? The lie didn’t happen once it was found to have been a lie; the lie happened when the President made a promise that was logically inconsistent with the law as passed. Indeed, back in March 2011, The Heritage Foundation’s Ed Feulner wrote about the unrealistic promises that had been made about ObamaCare. He wrote:

Health plans can be grandfathered in, all right, but only if they meet a variety of requirements. That’s not what Americans were promised. Plus, plans can lose their grandfathered status for making changes that aren’t deemed “reasonable” by the expanding federal bureaucracy.

The Obama administration itself has estimated that 49 percent to 80 percent of small-employer plans, 34 percent to 67 percent of large-employer plans and 40 percent to 67 percent of individual insurance coverage won’t be grandfathered in by the end of 2013. If you like your health plan, well – sorry, but the odds are not in favor of you getting to keep it. [“Grim Prognosis for a Sick Act,” by Edwin J. Feulner, The Heritage Foundation, March 21, 2011]

And that’s exactly what’s happening now. Eight paragraphs into its Lie of the Year feature, PolitiFact comes clean with what it’s up to:

Obama’s ideas on health care were first offered as general outlines then grew into specific legislation over the course of his presidency. Yet Obama never adjusted his rhetoric to give people a more accurate sense of the law’s real-world repercussions, even as fact-checkers flagged his statements as exaggerated at best.

Instead, he fought back against inaccurate attacks with his own oversimplifications, which he repeated even as it became clear his promise was too sweeping.

In other words, PolitiFact is not dinging the President for making the unrealistic promises that got him elected and then re-elected. Rather it is dinging him for failing to admit he had sold snake oil when the rest of the country realized he had sold them snake oil. Now, why in the world would a politician think he could get away with that? Doesn’t he know outfits like PolitiFact have been on the case?

That’s your cue, R. Emmett Tyrell, Jr.:

Like all other thoughtful observers of American media, [James] Taranto recognizes that they are heavily biased toward the Democratic Party and the left in general. […] Taranto believes that [this bias] has a harmful effect on left-wing politics, often causing left-wing candidates to lose at the polls.

According to the Taranto Principle, the media’s failure to hold left-wingers accountable for bad behavior merely encourages the left’s bad behavior to the point that its candidates are repellent to ordinary Americans. [The American Spectator, September 25, 2008]

The Taranto Principle is ever at work. PolitiFact, as Sean Higgins noted last month, has not been on the case: “In six separate columns addressing the Obama claim’s truthfulness between 2008 and 2012, the Tampa Bay Times’ influential fact-checking group did not once correctly label it as false.” [Washington Examiner, November 4]

And as Higgins notes this week, PolitiFact’s Lie of the Year feature actually rewrites its own fact-checking history. PolitiFact writes:

In 2009 and again in 2012, PolitiFact rated Obama’s statement Half True, which means the statement is partially correct and partially wrong. We noted that while the law took pains to leave some parts of the insurance market alone, people were not guaranteed to keep insurance through thick and thin. It was likely that some private insurers would continue to force people to switch plans, and that trend might even accelerate.

Higgins: “[R]ating something as ‘half true’ when it is flat-out false is still missing the mark by a significant margin. And it ignores that in three other columns relating to the claim 2012, PolitiFact gave ratings that failed to indicate the claim was false and served to shoot down Republican critics.” [Washington Examiner, December 12]

So if Obama thought he could get away with continuing to lie, it’s probably because outfits like PolitiFact have been so willing to perpetuate lies under the cover of fact-checking. Now PolitiFact says President Obama should have admitted sooner that he was wrong. OK. The world is still waiting for PolitiFact to admit it was wrong.

Posted on 12/13/13 10:40 PM by Alex Adrianson

Killing Eagles Is OK with the Government If You Do It While Making Politically-Correct Energy

The AP’s Dina Cappiello reported earlier this year that the Obama administration had a double standard when it came to energy companies killing birds. Today, that double standard appears to be even more pronounced.

In May, Cappiello noted that the administration had never fined or prosecuted a wind-energy company, despite more 573,000 estimated birds killed by the churning blades at wind farms each year. Yet, the administration fined BP $100 million for killing migratory birds during the 2010 Gulf oil spill, and has prosecuted coal companies over birds getting electrocuted by power lines or drowned in waste pits. At the same time, the administration had refused to say how many birds were reported killed by wind-power companies, claiming the information belonged to the companies. [AP, May 14]

Since that article, the government accepted a $1 million settlement with Duke Energy over the deaths of 160 birds, including 14 eagles, since 2008 at its wind farms in Wyoming. But the favoritism toward wind appears intact. Late last week, the Interior Department announced a new rule that would allow wind energy producers to continue killing eagles for up to 30 years. The Department described the rule as giving the wind power industry regulatory certainty while requiring regular reporting and remedial measures if too many eagles are killed. [National Journal, December 5]

The point of the favoritism is not to increase America’s energy supplies. The administration is committed to renewable energy as a way of fighting global warming, and it would be embarrassed if the wind industry couldn’t compete with fossil fuels despite the billions in subsidies the renewables have received.

The Wall Street Journal has reported that wind alone receives nearly eight times the subsidies of the oil and gas industry and nearly three times the combined subsidies received by oil, gas, and coal companies. The difference is more stark when compared on the basis of subsidies per unit of energy produced. Wind receives subsidies of $56.29 per megawatt-hour produced. Oil, gas, and coal together receive about $0.64 per megawatt-hour of energy produced. [Wall Street Journal, August 17, 2012]

Wind supplies only about 1.4 percent of total energy consumption. Moreover, the Institute for Energy research finds that subsidies for wind do almost nothing to reduce the emission of greenhouse gasses. Production and investment tax credits constitute about 36 percent of all energy-related tax subsidies and most of those go to wind development. Yet, they are responsible for reducing carbon dioxide emissions by only about 0.3 percent annually. [Institute for Energy Research, July 16]

Posted on 12/13/13 05:48 PM by Alex Adrianson

So far ObamaCare Is Still the New Coke of Government Programs

The latest enrollment data from the Department of Health and Human Services show that people aren’t signing up for coverage through the exchanges, even though many of them are eligible. John Davidson summarizes:

In October, more than 1 million Americans were eligible for ObamaCare coverage, yet only about 106,000 chose to purchase plans. By the end of November, the number of eligible Americans who had not selected a plan rose to nearly 2 million, while the total number of those who have selected a plan was just shy of 365,000. Based on these figures, it seems that many people who are eligible for ObamaCare simply don’t want it or can’t afford it—or both.

Meanwhile, more than 800,000 Americans have logged onto the ObamaCare exchanges looking to purchase private coverage and instead discovered they are eligible for Medicaid or CHIP. This raises the prospect that the ObamaCare exchanges will actually trap far more people in Medicaid—the worst structure for health coverage in the country, with far worse outcomes than private insurance—than it will enroll in private plans. […]

In Texas, which has more than 6 million uninsured residents, only 14,000 people signed up for coverage through November. [The Federalist, December 11]

As Davidson notes, unless ObamaCare enrollment accelerates by a factor of 10 over the next two months and includes the young and healthy people who don’t really need pricey insurance, then the country will have a health insurance death spiral going on.

Posted on 12/12/13 08:13 PM by Alex Adrianson

To Do: Examine the State of Our Constitutional Order

Learn how the progressive break from the original constitutional structure enabled today’s major disarrays in American governance, “from deficits and debt to health care, financial services, declining standards of living and more.” Richard Epstein will discuss his new book, The Classical Liberal Constitution: The Uncertain Quest for Limited Government, at noon on December 12 at The Cato Institute.

Find out how the Supreme Court bungled the Roe v. Wade decision. Clarke Forsythe will talk about his new book Abuse of Discretion: The Inside Story of Roe v. Wade at The Heritage Foundation on December 10. Forsyth’s talk will begin at 10 a.m.

Discover how a blog affected what the Supreme Court heard. Randy Barnett, Orin Kerr, and Ilya Somin will talk about their new book, A Conspiracy Against Obamacare The Volokh Conspiracy and the Health Care Case at The Heritage Foundation on December 10. The talk will begin at noon.

Take in some of the best short films showcasing innovative efforts to fight poverty. On December 14 in New York, the PovertyCure’s International Short Film Festival will award over $30,000 in prize money to film and video makers.

Hear some optimism about America’s future. Michael Lotus will talk about his new book America 3.0 at the Heartland Institute on December 12. America 3.0 argues that the 21st century “will bring immense productivity, rapid technological progress, greater scope for individual and family-scale autonomy, and a leaner and strictly limited government.” Lotus’s talk will begin at 11:30 a.m.

Find out how the revolutions of 1989 remain incomplete in the Balkans. The Heritage Foundation will host a discussion on how the region can benefit from more rule of law and more free markets. The discussion will begin at 10:30 a.m. on December 13.

Posted on 12/06/13 06:48 PM by Alex Adrianson

Britain Embraces Pro-Growth Dynamic Tax Analysis

The British Treasury is coming around to the view that people change their behavior in response to changes in tax rates and that those changes need to be accounted for in assessing tax policies.

Previously, the Treasury had assumed that tax cuts lead to proportional losses in government revenue because the size of the total economic pie was unaffected. This week, Treasury’s latest Autumn Report to the Parliament departed from that practice, assuming that rate cuts would add to the economy by between 0.6 percent and 0.8 percent per year. That means that between 46 percent and 58 percent of the revenue loss as calculated on a static basis would be recovered by the Treasury because the overall economy would be bigger. [BBC News, December 5]

The TaxPayers’ Alliance has published an analysis praising the move while arguing that the Treasury’s estimates still likely understate the economic gains from tax cuts: “[T]he model should be seen as the start of a process of developing and refining dynamic analysis to support and – over time – replace static policy analysis.” [TaxPayers’ Alliance, December 5]

Meanwhile, in the United States, the refusal of legislative scorekeepers to do dynamic analysis of tax proposals means that Congress thinks tax cuts will lose 30 percent more revenue than they actually will, according to the Tax Foundation. [“Using Dynamic Analysis Makes Tax Reform 30 Percent Less Challenging,” by Scott A. Hodge, Stephen J. Entin, and Michael Schuyler, The Tax Foundation, August 26]

Posted on 12/06/13 06:11 PM by Alex Adrianson

Problem and Solution, Health Care Edition

“The challenge, I think, that we have going forward is not so much my personal management style or particular issues around White House organization. It actually has to do with what I referred to earlier, which is we have these big agencies, some of which are outdated, some of which are not designed properly. […] Because the White House is just a tiny part of what is a huge, widespread organization with increasingly complex tasks in a complex world.”
—President Barack Obama, explaining the problems with the Affordable Care Act to MSNBC’s Chris Matthews, as quoted by Reid Epstein [Politico, December 5]

“If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstance, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders. We must solve it be some form of decentralization. But this answers only part of our problem. We need decentralization because only thus can we ensure that the knowledge of the particular circumstances of time and place will be promptly used. […] Fundamentally, in a system where the knowledge of the relevant facts is dispersed among many people, prices can act to coordinate the separate actions of different people in the same way as subjective values help the individual coordinate parts of his plan.”
—Friedrich Hayek, “The Use of Knowledge in Society” [The American Economic Review, September 1945]

Posted on 12/06/13 04:50 PM by Alex Adrianson

Minimum Wage Laws Are Really Minimum Skills Laws

James Sherk and John Ligon:

Businesses would respond to this increase the same way they respond to other cost increases—by purchasing less of the more expensive good or service. This would hurt less-skilled workers’ prospects for advancement.

Most minimum-wage jobs are entry-level positions filled by workers with limited education and experience. Almost three-fifths of minimum-wage workers have no more than a high school education, and half are under the age of 25. They work for the minimum wage because they currently lack the productivity to command higher pay.

Minimum-wage jobs give these workers experience and teach them essential job skills. Often these skills pertain more to general employability than to a particular job: the discipline of being a reliable employee, learning how to interact with customers and coworkers, how to accept direction from a boss, etc. These skills are essential to getting ahead in the workplace but difficult to learn without actual on-the-job experience.

Once workers gain these skills, they become more productive, and most quickly earn raises or move to higher-paying jobs. Over two-thirds of workers starting out at the minimum wage earn more than that a year later. Minimum-wage increases saw off this bottom rung of many workers’ career ladders. [Internal citations omitted.] [Heritage Foundation, December 5]

But if you think a higher minimum wage is a good idea, Don Boudreaux has a question for you:

Suppose that you’re at a McDonald’s restaurant or at a Safeway supermarket or at the office of a maid-service company and you see a 20-something young woman. The woman is obviously poor by American standards and her English is broken and heavily accented. She has no certifiable job experience. She applies for a job and is rejected. She – with entrepreneurial gumption – responds to the rejection by offering to work, not for the minimum wage of $7.25 per hour but, instead, for $5.00 per hour. You observe the manager’s evident interest in her counteroffer. The manager ponders for a minute or two and then whispers to her – yet loud enough for you to overhear – “Look, that’s against the law, but I can use you at $5.00 per hour. So, okay, you’re hired! But please don’t tell anyone or else I’ll be in serious trouble and you’ll lose this job.”

Would you – you personally – intervene to stop this woman from taking this job? Would you – you personally – be willing to look her in the eyes and tell her that she may not take that job? Would you – you personally – inform this young woman (with regret, of course) that she must remain unemployed for the time being and resume her job search elsewhere? And would you – you personally – be willing to use force against this woman to prevent her from working at $5.00 per hour if she stubbornly ignores your demands? Would you be willing, if her stubborn refusal to refuse the job persists, to poke a gun in her face to prevent her from working at an hourly wage of $5.00 per hour? [Cafe Hayek, December 4]

Posted on 12/06/13 03:43 PM by Alex Adrianson

Nelson Mandela, R.I.P.

Nelson Mandela, who led the struggle against Apartheid and served as South Africa’s first post-Apartheid president, died on Thursday at the age of 95. Mandela defeated Apartheid, South Africa’s system of racial segregation that made blacks second-class citizens. More than that, he led the way to a peaceful and democratic South Africa, in defiance of all expectations. As John Gizzi observes, Mandela went to prison in 1964 as a disciple of violent Marxist revolution, but emerged in 1990 as a leader for racial reconciliation:

Mandela founded and became co-chairman of the militant wing of the African National Congress known as Unkhtonto we Sizwe, or Spear of the Nation. As a young man, he studied the guerrilla teachings of Mao Zedong and Che Guevara. Tactics of the South African faction included sabotage, bombing power plants, military installations, and transport lines when civilians were not present.

When those tactics failed, Mandela wrote, Spear of the Nation would resort to “guerrilla warfare and terrorism.” Most of the authors of the manifesto of Spear of the Nation were white communists, including South African Communist Party General Secretary and close Mandela friend Joe Slovo. […]

Following South Africa’s transition to rule by its black majority and Mandela’s election as president, he surprised those who feared his ascension to power. There was no retribution against past enemies. Mandela led by example, meeting with Percy Yutar, who had led the successful prosecution that sent him to prison for so long. He even hosted his former jailer at lunch!

He created a Truth and Reconciliation Commission, in which people received amnesty for testifying about crimes committed during the apartheid regime. There were public shows of “reconciliation,” in which anyone could renounce the past deeds of apartheid. There were no political “show trials.”

He not only embraced the hated whites-dominated rugby club the Springboks, but when the team won the 1995 Rugby World Cup championship, Mandela wore its team shirt as he handed the trophy to Captain Francois Pienaar.

As a result, South Africa’s white business community did not flee. The economy remained essentially free-market and there have been free elections and peaceful transitions for the two presidents following Mandela. [Newsmax, December 5]

As Paul Jacob points out, a key reason the transition from Apartheid was relatively peaceful was that Mandela and his African National Congress recognized the need for institutions that protected minority political rights. So they changed the winner-take all voting system to a proportional representation system. That allowed minority (white) votes to gain representation in the National Assembly. That and other power-sharing arrangements contributed to racial reconciliation in the country. [Common Sense, December 6]

In his autobiography, Long Walk to Freedom, Mandela explained his transformation in prison:

It was during those long and lonely years that my hunger for the freedom of my own people became a hunger for the freedom of all people, white and black. I knew as well as I knew anything that the oppressor must be liberated just as surely as the oppressed. A man who takes away another man’s freedom is a prisoner of hatred, he is locked behind the bars of prejudice and narrow-mindedness. I am not truly free if I am taking away someone else’s freedom, just as surely as I am not free when my freedom is taken from me. The oppressed and the oppressor alike are robbed of their humanity.

When I walked out of prison, that was my mission, to liberate the oppressed and the oppressor both. Some say that has now been achieved. But I know that that is not the case. The truth is that we are not yet free; we have merely achieved the freedom to be free, the right not to be oppressed. We have not taken the final step of our journey, but the first step on a longer and even more difficult road. For to be free is not merely to cast off one’s chains, but to live in a way that respects and enhances the freedom of others.

Posted on 12/06/13 01:16 PM by Alex Adrianson

A Law onto Themselves

News stories of police misfeasance are about as common as stories of young celebrity women having misadventures—OK, maybe even more common than that. But two such stories particularly caught our eye this week. They show not just police misbehaving, but doing so under the apparent protection of the law itself.

First: If you want to bully someone in the state of Missouri, you’ve got to get the right permit first. That would be a policeman’s badge. In Missouri, “making a credible threat […] against the life of, or a threat to cause physical injury to, or the kidnapping of, the person, the person’s family, or the person’s household members or domestic animals or livestock” is considered aggravated stalking; but law enforcement officers “conducting investigations of violation of federal, state, county, or municipal law,” are exempted from that provision.

J.D. Tuccille uncovered this fact about the state of Missouri law while reporting the story of a Kansas City man who says that police threatened to shoot his dog if he forced them to get a warrant in order to search his house. [Reason, December 5]

Second: In New York City, the District Attorney has filed assault charges in the shooting of innocent bystanders by police officers. The culprit, according to the District Attorney, is not either of the cops who pulled their triggers, but the unarmed man at whom the police were shooting. The shooting happened in September after police responded to a mentally disturbed—and, again, unarmed—man wandering through traffic outside New York’s Port Authority Bus Terminal. “The defendant is the one that created the situation that injured innocent bystanders,” said assistant district attorney Shannon Lucey. Good thing the police were there to protect citizens from the situation! [New York Times, December 4]

Posted on 12/05/13 04:48 PM by Alex Adrianson

Do Prices Not Matter? That’s What You Have to Believe to Think a Higher Minimum Wage Is a Good Idea

Why not raise the minimum wage? After all, economists Alan Krueger and David Card have done studies showing that raising the minimum wage—contrary to what the opponents say—does not lead to job losses.

That’s a typical argument made by proponents of raising the minimum wage, an issue that’s getting a lot of attention because of Thursday’s 100-city protest at fast good restaurants. The Krueger/Card studies from 1994 and 2000 compared total fast food employment in New Jersey, which raised the minimum wage, with that in Pennsylvania, which did not. Kreuger/Card found that raising the minimum wage had either no or a small positive effect on employment.

As Diana Furchtgott-Roth points out, the argument against minimum wage laws is that workers at or near the minimum-wage level are at risk of losing their jobs if the minimum is raised. Nobody argues that workers whose productivity exceed the minimum wage are at risk of losing their jobs. So comparisons of total employment in a sector are evidence only that the researchers missed the point.

Card and Krueger do not include information on the portion of employment at minimum wage at any date in time. No information was given on whether the minimum law was binding, and to what extent, for this sample.

The studies did not include information by county, such as income, unemployment, teen unemployment, labor force, and labor force participation rates. Neither did it include changes in state taxes and franchise fees. […]

Card and Krueger focus exclusively on fast food establishments, but many other minimum wage employment opportunities in the service industry, particularly the hospitality industry, are also likely affected.

Finding effects of raising the minimum wage is challenging, because 97 percent of American workers now make above the minimum wage-not because it is the law, but because employers have to pay higher compensation packages to retain workers. That is one reason why some academic studies do not find major negative effects of minimum wage increases. [, December 4]

Proponents want a minimum wage hike of around 39 percent. As Furtchgott-Roth points out, if you think a 39 percent price hike would cause you to buy less of something, then why wouldn’t you also think employers might buy less labor at a higher price?

Posted on 12/05/13 03:35 PM by Alex Adrianson

Advise and Consent, R.I.P.?

Will the Senate actually get to exercise its constitutional prerogative to “advise and consent” on presidential nominations? Or can the President just appoint whoever he wants and ignore the Senate?

Pretty soon, in January in fact, the Supreme Court will hear the case NLRB v. Noel Canning. That’s the one that challenges President Obama’s use of the recess appointment power to appoint three members to the National Labor Relations Board in January 2012. He claimed the power to do that even though Congress was not officially in recess. According to the administration, Congress’s sessions didn’t actually count as sessions because they were “sham sessions” held only for the purpose of preventing the President from using the recess appointment power. So far, the Obama administration has lost on this issue in three lower courts.

As Ilya Shapiro and Trevor Burrus point out, Presidents have been finding ways to expand the recess appointment power—and thus avoid the need for Senate confirmation of appointees—for a very long time. At the Founding, it was understood that recess appointments could be made only for positions that became vacant during a recess, not merely for any vacancy that remained unfilled when a recess occurred. That limit ended under President Monroe. It was also understood that a recess was a break between sessions. Under President Harding, a recess came to mean breaks during sessions. Eventually, under President Clinton, intercession recess appointments could be made during breaks as short as 10 days. Then came President Obama declaring that pro-forma sessions—a tactic invented by Sen. Harry Reid, by the way—don’t count as sessions at all.

Obama’s move, however, stands apart as a threat to the separation of powers. Shapiro and Burrus, summarizing the Cato Institute’s amicus brief on the case, explain:

Whereas previous presidents had taken the less egregious step of redefining a “vacancy” and a “recess,” Obama went further in defining an “actual” Senate session. We argue that separation of powers demands that the president not be allowed to meddle in the Senate’s internal processes, which the Constitution commits to the Senate’s discretion. (It would even be illegitimate for the Supreme Court to define a Senate session!) We also argue that the president created an ad hoc standard to define a Senate session, which arbitrariness only underscores how dangerous it is to allow the executive to encroach on the legislative branch.

Finally, we point out that the Recess Appointments Clause is on its last legs; unless the judiciary intervenes, there will only be political gamesmanship divorced from constitutional principle. Without the Supreme Court’s strong guidance, the Senate will increasingly have to jump through hoops of the president’s creation to perform its duty to advise and consent on nominations. [Cato Institute, December 2]

Posted on 12/04/13 06:35 PM by Alex Adrianson

Those Who Know How ObamaCare Works Are the Most Opposed to It

It seems the more people know about Obamacare, the more likely they are to oppose it. But the people most harmed by the law are the least knowledgeable.

A new Gallup poll finds that among those who are not familiar with ObamaCare, 41 percent approve, 43 percent disapprove, and 16 percent have no opinion. Among those who are familiar with the law, 40 percent approve, 59 percent disapprove, and 2 percent have no opinion.

The poll also found an age gap in familiarity about the law. Sixty-three percent of 18- to 29-year-olds are familiar with the law. The figure for older age groups ranges from 72 percent to 77 percent. [Gallup, December 2]

Avik Roy has calculated that men in their 20s are going to see the most significant increases in their out-of-pocket costs for health insurance compared to everyone else. Part of the reason for that result is that ObamaCare contains provisions that restrict age- and gender-based differences in plan pricing. And there is also the fact that subsidies go up as premiums go up.

If you’re a 27-year-old man, your average premium under our methodology, pre-Obamacare, is $133 a month. Post-Obamacare, that increases to $201. If you add in the subsidies that accrue to someone with the median income of a 27-year-old man, the net cost of Obamacare insurance goes down slightly to $188. That’s a 41 percent increase, despite the impact of subsidies.

If you’re a 64-year-old woman, on the other hand, your average pre-Obamacare premium was $430 a month. Post-Obamacare, the underlying premium increases to $545 a month. But when you factor in subsidies for the average 64-year-old woman, the net cost of Obamacare insurance drops to $292. That’s a 32 percent decrease, inclusive of subsidies, from pre-Obamacare premiums, and a 46 percent discount off of post-Obamacare prices. [Forbes, November 4]

If more 20-something men had the facts, ObamaCare’s standing in the polls could be even worse.

Posted on 12/03/13 03:26 PM by Alex Adrianson

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