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InsiderOnline Blog: June 2013

To Do: Celebrate America’s Birthday

• Celebrate America’s birthday, July 4. And if you happen to be in the area of Centreville, Va., (about 25 miles west of the nation’s capital) come join fellow conservatives at the 42nd National Fourth of July Soiree. You get barbeque, blue grass, balloon artists, and much more. The gathering runs from 11 a.m. – 3 p.m. at Bull Run Regional Park.

• If you are a witty, eloquent writer, nominate yourself for a $10,000 prize. The Reason Foundation is accepting entries until July 31 for the Bastiat Prize. The Bastiat Prize is named for the French writer Frederic Bastiat, whose writings included the “Candlemakers’ Petition,” which demonstrated the absurdity of protectionism, and the “Parable of the Broken Window,” which demonstrated the problem of the hidden costs of government action. If you are nearly that clever, then send your name and articles in.

• Learn how the Reagan administration protected both the environment and freedom and prosperity despite the best efforts of environmental extremists. Former Reagan Administration official William Perry Pendley will talk about his new book, Sagebrush Rebel: Reagan’s Battle with Environmental Extremists and Why It Matters Today at The Heritage Foundation. Pendley’s talk will begin at noon on July 8.

Posted on 06/28/13 09:22 PM by Alex Adrianson

Coming Soon: ObamaCare Data Hub

Dug up by John Merline, here are some details on what the ObamaCare bureaucracy will be doing with your information:

Sen. Max Baucus, D-Mont., asked HHS to provide “a complete list of agencies that will interact with the Federal Data Services Hub.” The Hub is a central feature of ObamaCare, since it will be used by the new insurance exchanges to determine eligibility for benefits, exemptions from the federal mandate, and how much to grant in federal insurance subsidies.

In response, the HHS said the ObamaCare data hub will “interact” with seven other federal agencies: Social Security Administration, the IRS, the Department of Homeland Security, the Veterans Administration, Office of Personnel Management, the Department of Defense and—believe it or not—the Peace Corps. Plus the Hub will plug into state Medicaid databases.

And what sort of data will be “routed through” the Hub? Social Security numbers, income, family size, citizenship and immigration status, incarceration status, and enrollment status in other health plans, according to the HHS. […]

[A February regulatory] filing describes a new “system of records” that will store names, birth dates, Social Security numbers, taxpayer status, gender, ethnicity, email addresses, telephone numbers on the millions of people expected to apply for coverage at the ObamaCare exchanges, as well as “tax return information from the IRS, income information from the Social Security Administration, and financial information from other third-party sources.”

They will also store data from businesses buying coverage through an exchange, including a “list of qualified employees and their tax ID numbers,” and keep it all on file for 10 years.

In addition, the filing says the federal government can disclose this information “without the consent of the individual” to a wide range of people, including “agency contractors, consultants, or grantees” who “need to have access to the records” to help run ObamaCare, as well as law enforcement officials to “investigate potential fraud.” [Investor’s Business Daily, June 25]

Posted on 06/28/13 07:04 PM by Alex Adrianson

We Are 72 Percent Poorer Because of Federal Regulations

“The growth of federal regulations over the past six decades,” writes Ron Bailey, “has cut U.S. economic growth by an average of 2 percentage points per year, according to a new study in the Journal of Economic Growth.” He continues:

As a result, the average American household receives about $277,000 less annually than it would have gotten in the absence of six decades of accumulated regulations—a median household income of $330,000 instead of the $53,000 we get now.

The researchers, economists John Dawson of Appalachian State University and John Seater of North Carolina State, constructed an index of federal regulations by tracking the growth in the number of pages in the Code of Federal Regulations since 1949. The number of pages, they note, has increased six-fold from 19,335 in 1949 to 134,261 in 2005. (As of 2011, the number of pages had risen to 169,301.) They devise a pretty standard endogenous growth theory model and then insert their regulatory burden index to calculate how federal regulations have affected economic growth. (Sometimes deregulation extends rather than shortens the number of pages in the register; they adjust their figures to take this into account.)

Annual output in 2005, they conclude, “is 28 percent of what it would have been had regulation remained at its 1949 level.” The proliferation of federal regulations especially affects the rate of improvement in total factor productivity, a measure of technological dynamism and increasing efficiency. Regulations also affect the allocation of labor and capital—by, say, raising the costs of new hires or encouraging investment in favored technologies. Overall, they calculate, if regulation had remained at the same level as in 1949, current GDP would have been $53.9 trillion instead of $15.1 in 2011. In other words, current U.S. GDP in 2011 was $38.8 trillion less than it might have been. [Reason, June 21]

Posted on 06/28/13 05:47 PM by Alex Adrianson

Those IRS Documents Don’t Show What the IRS Thinks They Show

The Internal Revenue Service eagerly informed Congress this week that it hadn’t really targeted conservative non-profit status applicants after all and to prove the point turned over internal guidance documents that did mention the word “progressive” as an example of a word to watch for. Aside from the fact that the main problem with the IRS’s behavior was the intrusive and probably unconstitutional nature of the questioning—not the targeting—there is a big difference between including the word “progressive” in your guidance materials and actually investigating progressive groups. So far, three liberal groups have claimed to have had trouble getting non-profit status. One group had its application denied, and thatgroup is not appealing that decision—which suggests the IRS probably got it right. Further, as David Fredoso reports, the guidance materials themselves show that conservative groups were targeted for different treatment:

In each list where it appears, the entry marked “progressive” is less specific, simply containing a warning against granting 501 c(3) status to groups that appear to be too political, but it includes no further instructions on what to do with such cases. […]

The “Tea Party” entry fell under a separate category in the earlier memos, marked “emerging issues,” and the targeting scandal pertains mostly to c(4) groups, although c(3) groups are mentioned in these watch lists as well. 

The instructions that appear in earlier versions of the watch list documents are much more specific for “Tea Party” groups than those for “progressive” groups. They dictate special scrutiny of both 501 c(3) and 501 (c)(4) Tea Party applicants. […]

Under the heading “disposition,” the document states:

Any cases should be sent to group 7822. Liz Hofacre is coordinating. These cases are currently being coordinated with EOT. [Conservative Intelligence Briefing, June 25]

On Thursday, the Treasury Inspector General for Tax Administration sent a letter to the top Democrat on the House Ways and Means Committee explaining that in fact the IRS really did target conservatives:

Based on the information you flagged regarding the existence of a ‘Progressives’ entry on BOLO lists, TIGTA performed additional research which determined that six tax-exempt applications filed between May 2010 and May 2012 having the words ‘progress’ or ‘progressive’ in their names were included in the 298 cases the IRS identified as potential political cases. We also determined that 14 tax-exempt applications filed between May 2010 and May 2012 using the words ‘progress’ or ‘progressive’ in their names were not referred for added scrutiny as potential political cases. In total, 30 percent of the organizations we identified with the words ‘progress’ or “progressive” in their names were processed as potential political cases. In comparison, our audit found that 100 percent of the tax-exempt applications with Tea Party, Patriots, or 9/12 in their names were processed as potential political cases during the timeframe of our audit. [Treasury Inspector General for Tax Administration Letter to Rep. Sander Levin (D-Mich.) as quoted by Paul Bedard at Washington Examiner, June 27]

Posted on 06/28/13 04:55 PM by Alex Adrianson

The Next Debate over Marriage

Justice Scalia has predicted the other shoe will drop: Whatever federalism noises the Supreme Court made this week about preserving a state’s right to define marriage, he says, the logic of the Court’s decision in United States v. Windsor leads to recognizing a federal right to same-sex marriage—regardless of what the voters of particular states choose to do. He may be right, but for now states retain the right to define marriage. Proponents of marriage should seize the opportunity now to frame the debate, says The Heritage Foundation’s Ryan Anderson:

[T]he Court will be less likely to issue an activist decision, less likely to usurp the authority of citizens, if it is clear that citizens are engaged in this democratic debate and care about the future of marriage.

There is a role to play for everyone. First and foremost, we need to start living out the truth about marriage. Long before there was a debate about same-sex anything, heterosexuals bought into a liberal ideology about sexuality that makes a mess of marriage — with cohabitation, no-fault divorce, extra-marital sex, non-marital childbearing, massive pornography consumption and the hook-up culture all contributing to the breakdown of our marriage culture.

So the first thing to do is for husbands and wives to be faithful to one another through thick and thin, till death do them part. Mothers and fathers must take their obligations to their children seriously. The unmarried must prepare now for their future marital lives, so they can live out the vows they will make. […]

In his dissent from the ruling on DOMA, Justice Samuel Alito perfectly frames the debate going forward as a contest between two visions of marriage — what he calls the “conjugal” and “consent-based” views.

Alito cites the book I co-authored with Princeton’s Sherif Girgis and Robert George as an example of the conjugal view of marriage: a “comprehensive, exclusive, permanent union that is intrinsically ordered to producing children.” He cites Jonathan Rauch as a proponent of the idea that marriage is a certain commitment marked by emotional union. And he explains that the Constitution is silent on which of these substantive, morally controversial visions of marriage is correct. The Court, he says, should decline to decide; it should defer to democratic debate.

So the second thing to do is to redouble our efforts at explaining what marriage is, why marriage matters and what the consequences are of redefining marriage. The left wants to insist that the redefinition of marriage is “inevitable.”

The only way to guarantee a political loss, however, is to sit idly by. We should frame our message, strengthen coalitions, devise strategies and bear witness. We must develop and multiply our artistic, pastoral and reasoned defenses of the conjugal view as the truth about marriage, and to make ever plainer our policy reasons for enacting it.

In this struggle to preserve marriage, as in the pro-life cause, we need to take a long view. Such a view doesn’t look to immediate wins or losses, but decades-long paradigm shifts that reshape how Americans think about marriage. [Daily Caller, June 27]

Posted on 06/28/13 04:17 PM by Alex Adrianson

Something About Federalism, They Said

In United States v. Windsor, the Supreme Court said withholding federal recognition of same-sex marriages that are recognized as a legal marriage by a state “is unconstitutional as a deprivation of the equal liberty of persons that is protected by the Fifth Amendment.” So was the majority opinion a defense of federalism—i.e., a state’s right to define marriage? Or was the Court making an equal protection of the laws argument—i.e., that same-sex marriage is a right but only in states that recognize same-sex marriage?

Justice Scalia thinks the majority opinion was really based on the majority’s belief that its opinions about same-sex marriage are better than the opinions of Congress, and that eventually the Court will also decide its opinions are better than those of states that still preserve the traditional definition of marriage. Here are a few choice highlights from his dissent:

“It is a familiar principle of constitutional law that this Court will not strike down an otherwise constitutional statute on the basis of an alleged illicit legislative motive.” Or at least it was a familiar princi­ple. By holding to the contrary, the majority has declared open season on any law that (in the opinion of the law’s opponents and any panel of like-minded federal judges) can be characterized as mean-spirited. […]

It takes real cheek for today’s major­ity to assure us, as it is going out the door, that a constitu­tional requirement to give formal recognition to same-sex marriage is not at issue here—when what has preceded that assurance is a lecture on how superior the majority’s moral judgment in favor of same-sex marriage is to the Congress’s hateful moral judgment against it. I promise you this: The only thing that will “confine” the Court’s holding is its sense of what it can get away with. […]

In my opinion, however, the view that this Court will take of state prohibition of same-sex marriage is indicated beyond mistaking by today’s opinion. As I have said, the real rationale of today’s opinion, whatever disappearing trail of its legalistic argle-bargle one chooses to follow, is that DOMA is motivated by “ ‘bare … desire to harm’” couples in same-sex marriages. […]

In sum, that Court which finds it so horrific that Congress irrationally and hatefully robbed same-sex couples of the “personhood and dignity” which state legislatures conferred upon them, will of a certitude be similarly appalled by state legislatures’ irrational and hateful failure to acknowledge that “personhood and dignity” in the first place. As far as this Court is concerned, no one should be fooled; it is just a matter of listening and waiting for the other shoe.

By formally declaring anyone opposed to same-sex marriage an enemy of human decency, the majority arms well every challenger to a state law restricting marriage to its traditional definition. Henceforth those challengers will lead with this Court’s declaration that there is “no legitimate purpose” served by such a law, and will claim that the traditional definition has “the purpose and effect to disparage and to injure” the “personhood and dignity” of same-sex couples. The majority’s limiting assurance will be meaningless in the face of lan­guage like that, as the majority well knows. That is why the language is there. The result will be a judicial distor­tion of our society’s debate over marriage—a debate that can seem in need of our clumsy “help” only to a member of this institution. […]

It is hard to admit that one’s political opponents are not monsters, especially in a struggle like this one, and the challenge in the end proves more than today’s Court can handle. Too bad. A reminder that dis­agreement over something so fundamental as marriage can still be politically legitimate would have been a fit task for what in earlier times was called the judicial tem­perament. We might have covered ourselves with honor today, by promising all sides of this debate that it was theirs to settle and that we would respect their resolution. We might have let the People decide.

But that the majority will not do. Some will rejoice into day’s decision, and some will despair at it; that is the nature of a controversy that matters so much to so many. But the Court has cheated both sides, robbing the winners of an honest victory, and the losers of the peace that comes from a fair defeat. We owed both of them better. [United States v. Windsor (2013)]

Posted on 06/28/13 03:20 PM by Alex Adrianson

A Physician Shortage Is Coming

ObamaCare will increase the demand for health care without doing anything to increase the supply of health care. Here is a recent projection of what the shortage in primary care physicians will look like:

Our analysis indicates that population growth, demographic changes, and an expansion of insurance spurred by Obamacare will contribute to a significant shortage in primary-care physicians over the coming decade. We project that by 2025, the United States will experience a shortage of roughly 30,000 primary-care physicians—with about 16.5 percent (4,950 physicians) of this shortage being driven by the expansion of insurance coverage under Obamacare, while the remaining 83.5 percent (25,050 physicians) will be due to population growth, aging, and various demographic shifts. [“The Obamacare Evaluation Project: Access to Care and the Physician Shortage,” by Paul Howard and Yevgeniy Feyman, Manhattan Institute, June 2013]

For some time, John Goodman has been warning about the shortages ObamaCare will create:

First, ObamaCare is supposed to insure 32 million additional people by this time next year. If the economic studies are correct, these newly insured will try to consume twice as much medical care as they have been. In addition, most of the rest of us will be forced to have more generous coverage than we previously had. There will be a long list of preventive services that all plans will be required to cover ? with no deductible and no copayment ? and commercial insurance will be required to cover a great many services previously avoided (including, everyone must know by now, contraception). These two changes alone will boost the demand for care considerably.

On the supply side, there is really no provision under ObamaCare to create more doctors. In fact, the supply of doctor services is likely to decrease because of two more features of health reform. Doctors, who are already weary from third-party interference in the practice of medicine, will step up their retirement dates as they contemplate the prospects of even more bureaucracy. Also, hospitals are acquiring doctors as employees at a rapid rate. Indeed, more than half of all doctors are now working for hospitals. When doctors quit their private practices and start working for hospitals, they reduce the number of hours they work. (Forty hour work weeks and golf on the weekends replaces 50 and 60 hour work weeks.) Since they have a guaranteed income, they also become less productive.

These four changes add up to one big problem: we are about to see a huge increase in the demand for care and a major decrease in the supply. In any other market, that would cause prices to soar. But government plans to control costs (even more so than in the past) by vigorously suppressing provider fees and the private insurers are likely to resist fee increases as well. That means we are going to have a rationing problem. Just as in Canada or Britain, we are going to experience rationing by waiting. [John Goodman’s Health Policy Blog, May 30]

Access to health insurance is not the same thing as access to health care.

Posted on 06/27/13 05:53 PM by Alex Adrianson

Stuck in 1972

Forty-year-old facts cannot validate constitutionally extraordinary limits on state authority over elections, said the Supreme Court on Tuesday. In Shelby County v. Holder, the Court ruled Section 4(b) of the 1965 Voting Right Act unconstitutional. That was the part of the law that set out criteria for determining which states had to get permission from either the Department of Justice or a federal court before making any changes to voting procedures.

Those criteria hadn’t been updated since 1972 even though the law has been reauthorized twice since then. As a result, the law was imposing burdens on states that no longer had large racial gaps in voter registration or turnout. On those measures, some of the covered states now look better than states not covered. Chief Justice John Roberts, writing for the Court, said that in ignoring these developments, Congress had created a second-class of statehood that offends the Constitution’s design of equal state sovereignty. “Over a hundred years ago,” he wrote, “this Court explained that our Nation ‘was and is a union of States, equal in power, dignity and authority.’ Indeed, ‘the constitutional equality of the States is essential to the harmonious operation of the scheme upon which the Republic was organized.’” Roberts continued:

In 1965, the States could be divided into two groups: those with a recent history of voting tests and low voter registration and turnout, and those without those charac­teristics. Congress based its coverage formula on that distinction. Today the Nation is no longer divided along those lines, yet the Voting Rights Act continues to treat it as if it were. […]

[…] Congress—if it is to divide the States—must identify those jurisdictions to be singled out on a basis that makes sense in light of current conditions. It cannot rely simply on the past.

One result of the decision is that states that fell under pre-clearance because of Section 4 are now able to implement voter ID laws without seeking permission. Congress might try to rewrite the preclearance criteria in a way that satisfies the high court. As James Taranto notes, however, politics will make that hard to do: Such an effort would risk putting Massachusetts, a bastion of the Democratic party, under pre-clearance, since that state currently has the largest gap between white and black voter turnout. [Wall Street Journal, June 26]

Posted on 06/26/13 03:38 PM by Alex Adrianson

Did IRS Harassment of the Tea Party Swing the 2012 Election?

We’ll never know for sure, but research by Stan Veuger & co. suggest the election might have turned out differently:

In a new research paper, Andreas Madestam (from Stockholm University), Daniel Shoag and David Yanagizawa-Drott (both from the Harvard Kennedy School), and I set out to find out how much impact the Tea Party had on voter turnout in the 2010 election. We compared areas with high levels of Tea Party activity to otherwise similar areas with low levels of Tea Party activity, using data from the Census Bureau, the FEC, news reports, and a variety of other sources. We found that the effect was huge: the movement brought the Republican Party some 3 million – 6 million additional votes in House races. That is an astonishing boost, given that all Republican House candidates combined received fewer than 45 million votes. It demonstrates conclusively how important the party’s newly energized base was to its landslide victory in those elections, and how worried Democratic strategists must have been about the conservative movement’s momentum. […]

The bottom line is that the Tea Party movement, when properly activated, can generate a huge number of votes—more votes in 2010, in fact, than the vote advantage Obama held over Romney in 2012. The data show that had the Tea Party groups continued to grow at the pace seen in 2009 and 2010, and had their effect on the 2012 vote been similar to that seen in 2010, they would have brought the Republican Party as many as 5 – 8.5 million votes compared to Obama’s victory margin of 5 million.

President Obama’s margin of victory in some of the key swing states was fairly small: a mere 75,000 votes separated the two contenders in Florida, for example. That is less than 25% of our estimate of what the Tea Party’s impact in Florida was in 2010. [Real Clear Markets, June 20]

Posted on 06/24/13 05:48 PM by Alex Adrianson

To Do: Keep an Eye on Russia

Find out what Russia is up to with its efforts to construct a Eurasian Union. The Heritage Foundation will host a half-day conference on June 27 in Washington, D.C.

Reflect on the Battle of Gettysburg and its meaning for the nation, which happened 150 years ago this July. Allen Guelzo of Gettysburg College will make remarks at the American Enterprise Institute in Washington, D.C., at 4:30 p.m. on June 26.

• If you are a young, professional, conservative woman, come meet other young, professional, conservative women at the Network of enlightened Women’s National Conference. The conference will be held June 27 – June 28 at The Heritage Foundation in Washington, D.C. Christina Hoff Summers will deliver a keynote address.

Request a free copy of the movie Amazing Grace, which tells the true story of William Wilberforce’s fight to abolish slavery. The offer is part of the Foundation for Economic Education’s Blinking Lights Project, which educates about the importance of personal character as a vital element of free society. Be sure to check that out, too.

• Don’t forget that next week is National Employee Freedom Week, “a national effort to inform union employees of the freedom they have regarding opting out of union membership and making the decision about union membership that’s best for them.”

• Save the dates! These events are no longer classified, are they?
—The annual IEA Hayek Memorial Lecture, delivered this year by Grover Norquist of Americans for Tax Reform, talking on “The Leave Us Alone Coalition vs. The Takings Coalition: The On-going Struggle” at 6:30 p.m. in London;
—The 42nd National Fourth of July Soiree, featuring barbeque, blue grass, balloon artists, and more at Bull Run Regional Park in Centreville, Va., on July 4 from 11 a.m. to 3 p.m.;
—The Heritage Foundation’s annual Scholars & Scribes review of the Supreme Court’s 2012-2013 term, July 11, in Washington, D.C.;
Freedom Fest, the largest gathering of free minds, July 10 – July 13 at Caesars Palace in Las Vegas;
—and Cato University, July 28 – August 3 at the Cato Institute in Washington, D.C.

Posted on 06/21/13 10:52 PM by Alex Adrianson

Who Elected Those Guys? Ask Teachers in Kansas

Last week, teachers in Deerfield, Kansas, did something that almost never happens, report James Sherk and Michael Cirrotti: They voted to decertify their union:

Unlike most public officials, unions do not stand for re-election, so their members cannot regularly hold them accountable. Workers can remove an unwanted union only by filing for decertification. But bureaucratic obstacles make it difficult to hold a vote on decertification. The hoops Deerfield’s teachers had to jump through illustrate this problem.

Joel McClure, the teacher who led the effort, submitted the appropriate paperwork to the Kansas Department of Labor in November 2012. But Kansas teachers can request a vote only in a two-month window every three years. KNEA officials contested the petition by claiming that the teachers missed the December 1 deadline. (The Department of Labor had misplaced the initial petition paperwork.) Then the KNEA objected that the teachers’ attorney was not certified in Kansas and that they did not have enough signatures. However, the teachers prevailed and voted out their union—in June, just eight months after the initial submission.

When asked why they went through such protracted effort, the teachers said their union ignored their concerns. They wanted instead to be actively involved in negotiations and work collaboratively with the school district. “The desire is for teachers to participate at the [bargaining] table, to have free access to information,” McClure said. “In our little school district, there’s no reason we can’t sit down at the table and work out our issues.” [The Foundry, June 18]

Did we mention that next week is National Employee Freedom Week?

Posted on 06/21/13 07:37 PM by Alex Adrianson

The Death Panel Is Coming

Last week, a federal judge in Philadelphia blocked the enforcement of an age-limit rule on lung transplants, thus allowing a very sick 10-year-old girl to obtain a new set of lungs. Doctors had said the girl, who suffers from cystic fibrosis, would live only three to five weeks without new lungs. Earlier, Secretary of Health and Human Services Kathleen Sebelius had said she would not to intervene in the case by overturning the rule.

When the ObamaCare-created Independent Payment Advisory Board is up and running in two years, it too will make decisions on matters of life and death, but unlike Sebelius’s decision on lung rules, the decisions of the IPAB cannot be reviewed by courts. Those decisions are also protected from politics in some extraordinary ways. As David Rivkin and Elizabeth Foley explain, the IPAB set-up is certainly unconstitutional, but likely not challengeable in the short run because no one would have standing to sue:

Once the board acts, its decisions can be overruled only by Congress, and only through unprecedented and constitutionally dubious legislative procedures—featuring restricted debate, short deadlines for actions by congressional committees and other steps of the process, and supermajoritarian voting requirements. The law allows Congress to kill the otherwise inextirpable board only by a three-fifths supermajority, and only by a vote that takes place in 2017 between Jan. 1 and Aug. 15. If the board fails to implement cuts, all of its powers are to be exercised by HHS Secretary Sebelius or her successor. […]

The power given by Congress to the Independent Payment Advisory Board is breathtaking. Congress has willingly abandoned its power to make tough spending decisions (how and where to cut) to an unaccountable board that neither the legislative branch nor the president can control. The law has also entrenched the board’s decisions to an unprecedented degree.

In Mistretta v. United States (1989), the Supreme Court emphasized that, in seeking assistance to fill in details not spelled out in the law, Congress must lay down an “intelligible principle” that “confine[s] the discretion of the authorities to whom Congress has delegated power.” The “intelligible principle” test ensures accountability by demanding that Congress take responsibility for fundamental policy decisions.

The IPAB is guided by no such intelligible principle. ObamaCare mandates that the board impose deep Medicare cuts, while simultaneously forbidding it to ration care. Reducing payments to doctors, hospitals and other health-care providers may cause them to limit or stop accepting Medicare patients, or even to close shop.

These actions will limit seniors’ access to care, causing them to wait longer or forego care—the essence of rationing. ObamaCare’s commands to the board are thus inherently contradictory and, consequently, unintelligible.

Moreover, authorizing the advisory board to make rules “relating to” Medicare gives the board virtually limitless power of the kind hitherto exercised by Congress. For instance, the board could decide to make cuts beyond the statutory target. It could mandate that providers expand benefits without additional payment. It could require that insurers or gynecologists make abortion services available to all their patients as a condition of doing business with Medicare, or that drug companies set aside a certain percentage of Medicare-related revenues to fund “prescription drug affordability.” There is no limit. [Wall Street Journal, June 19]

Posted on 06/21/13 07:05 PM by Alex Adrianson

What Is Candy? Depends on Which State Wants to Tax It Online

Forcing online retailers to remit sales taxes to the state where the purchaser resides, as the federal Marketplace Fairness Act (MFA) does, is not going to level the playing field between online and bricks-and-mortar retailers. Rather, as James Gattuso explains, it will tilt the playing field heavily against online retailers—especially smaller ones:

While the legislation does require states to provide retailers with free software for managing tax compliance, that software need only cover the individual state. Retailers are left on their own to get nationwide software, unless they want to integrate 46 individual software packages. No compensation is offered for recurring costs incurred by retailers, such as accounting services or online tax management services.

In addition, internal staff time would be needed for an array of tasks, including handling claims by tax-exempt customers, fielding inquiries from tax authorities, and addressing the inevitable glitches.

Even the simple act of classifying the item being sold can be problematic, with thousands of idiosyncratic distinctions and definitions through each state’s tax code. In Wisconsin, the Wisconsin flag as well as the U.S. flag is not subject to tax. All other flags are taxable. Unless they are bundled with flagpoles, in which case the rules change yet again.

Similarly, candy is defined—under the “streamlined” sales tax agreement, as “a preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts or other ingredients in the form of bars, drops, or pieces.” But sellers beware: “‘Candy’ shall not include any preparation containing flour and shall require no refrigeration.” Thus defined, states still vary on whether the concoction is taxable or not.

The problems do not end with the sale. Each of the 46 state tax authorities with which retailers would have to deal directly require tax returns to be completed, on an annual, quarterly, or even weekly basis. To ensure that it is all done correctly, sellers would be subject to audits from each of 46 states. (If tax authorities on Indian reservations are included—as they are in the MFA as passed by the Senate—the number of tax forms and potential audits jumps to the hundreds.) [The Heritage Foundation, June 19]

Posted on 06/21/13 05:36 PM by Alex Adrianson

Carbon Taxers Forget the Externalities of Not Using Cheap, Abundant Energy

One reason putting a tax on carbon in order to price its negative externalities is not a free-market idea:

[E]ven if SCC [social cost of carbon] estimates were not assumption-driven hocus-pocus, their use by activists, policymakers, and agencies would still be biased and misleading, because proponents of “climate action” always ignore the social costs of carbon mitigation.

As Cato Institute scholar Indur Goklany explains in a recent study, fossil fuels are the chief energy source of a “cycle of progress” responsible for the amazing improvements of the past 250 years in life expectancy, health, nutrition, safety, comfort, human capital formation, and per capita income. The cycle of progress is to no small extent a “positive externality” of fossil fuels. Thus, policies that suppress the extraction, delivery, and consumption of fossil fuels, or that make fossil energy less affordable, have social costs in addition to whatever compliance burdens and economic losses the policies entail.

For example, the more stringent the carbon mitigation scheme, the more severe the impacts on household income and job creation. Numerous studies find that poverty and unemployment increase the risk of sickness and death. Carbon tax advocates never acknowledge this side of the ledger.

Given the continuing importance of fossil fuels to human flourishing and the undeniable connection between livelihoods, living standards, and life expectancy, carbon taxes can easily do more harm than good to public health—even if one accepts the IPCC’s version of the science.

That’s from Marlo Lewis’s excellent summary of the recent R Street-Heartland Institute debate on the carbon tax. [, June 16]

Posted on 06/21/13 04:44 PM by Alex Adrianson

Progressives Make Use of Rights That Progressives Think Should Not Exist

It’s a good thing for progressives—and everybody else—that one particular progressive idea hasn’t been adopted, observes Wendy Kaminer:  

If progressives had their way, the ACLU’s latest challenge to the NSA’s domestic surveillance would easily be dismissed. ACLU v Clapper, filed in the wake of the Snowden revelations, is based on the ACLU’s First and Fourth Amendment rights, which, according to progressives, ACLU should not possess. It is, after all, a corporation, and constitutional amendments aggressively promoted by progressives would limit constitutional rights to “natural persons.”

“The words people, person, or citizen as used in this Constitution do not include corporations, limited liability companies or other corporate entities,” the popular People’s Rights Amendment declares. [The Atlantic, June 17]

Arthur Koestler’s protagonist in Darkness at Noon referred to the first-person singular as a “grammatical fiction” because it conflicted with the logic of self sacrifice demanded by the party. Today’s real progressives are now trying to subvert the plural form. By insisting that only individuals, not corporations, have rights, they elide the fact that corporations are made up of individual people. Individuals can’t fully exercise their rights if the things they choose to do cooperatively with others do not have the same protections as they things they choose to do alone. Maybe the American Civil Liberties Union can spread the word.

Posted on 06/21/13 04:06 PM by Alex Adrianson

Rector on CBO on Immigration

The Congressional Budget Office told us this week that letting large numbers of immigrants into the country and changing the status of those currently here illegally will be great for the economy and the federal budget. Robert Rector has a few things to say about the CBO’s scoring of the Gang of Eight immigration bill. Here are the highlights:

[T]he immigration coming in under this bill looks like previous immigration in the sense that its predominantly lower-skilled plus the fact that you’re taking 11 million illegal immigrants and giving them access to the welfare and entitlement states. They have an average education of 10th grade, so it’s very difficult to imagine that those households would somehow pay enough in taxes to equal their benefits […] .

The trick is the CBO 10-year budget window. […] For mysterious reasons, when an amnesty bill is written, the amnesty recipients become eligible for everything under the sun in about the 11th year. So that they pay taxes in the first 10 years and they don’t get additional benefits for some mysterious reason until you move outside the CBO budget window. […]

[T]he federal government, because of Social Security and Medicare, inherently transfers from the non-elderly to the elderly. State and local governments kind of do the opposite. If you just look at state and local governments you would find that they transfer from the elderly to the non-elderly to pay for education. The elderly pay a lot of property tax; they don’t get any education benefits any more. […] Of course immigrants are not elderly themselves. For a limited period of time they pay in but then they take out more than they have paid in. It’s important to put both flows together because the opposite process is happening down at the state and local level. […]

One of the interesting things that CBO does tell us is that the number of illegal immigrants who will enter the country over the next 20 years goes down by only 25 percent. There would have been, they estimate, 10 million illegal immigrants entering over the next 20 years. They estimate that that will drop to 7.5 million illegal immigrants entering the country […] . The net cost of those illegals alone would be about $400 billion over that period. […]

When you look at the Gang of Eight explain their bill they always say: Oh, we’re shifting from low-skill immigration to high-skill immigration. You can trust us. That’s what we do.

But in fact the numbers from CBO show exactly the opposite. Roughly 80 … 85 to 90 percent of the individuals getting green card status are not skill-based. [The Foundry, June 21]

Posted on 06/21/13 03:10 PM by Alex Adrianson

Turn On, Tune In, Pay Up

Online learning may transform higher education someday, but right now it serves mainly as a prop in the familiar university system, say Andrew Kelly and Frederick Hess:

Many online programs generate large revenues because most colleges charge the same price (or more!) for students enrolled online as for those on campus. A survey of 199 universities by the educational technology arm of the Western Interstate Commission on Higher Education found that 93 percent of universities charged the same or higher tuition for their online programs. This is bizarre, given that online courses are less costly to deliver than in-person courses. But instead of competing on price (meaning that cost savings get passed to the student), institutions have maintained in-person prices for online courses—even as the cost of delivery has fallen.

What do colleges do with that extra revenue? They cross-subsidize activities on the brick and mortar campus: unfunded research, student life, institutional aid programs, and so on. Put more genteelly, they “reinvest” it in their traditional campus.

Real innovation, as Kelly and Hess point out, is about unbundling the research-based university, and that’s not going to happen until the government regulations, subsidies, and accreditation policies that protect that model from competition are reformed. [“Beyond Retrofitting: Innovation in Higher Education,” by Andrew P. Kelly and Frederick Hess, Hudson Institute, June 2013.]

Posted on 06/20/13 05:25 PM by Alex Adrianson

Not Even Low-Income Workers Can Count on Coming Out Ahead under ObamaCare

Some low-income workers could end up paying a lot more for health insurance than they paid before ObamaCare became law, reports Jillian Kay Melchior. ObamaCare requires employer-provided health insurance to cover at least 60 percent of health-care costs while not costing employees more than 9.5 percent of their household incomes. Since low-income households may have multiple sources of income, it can be difficult for companies to figure out if a particular plan is sufficient to avoid penalties. The federal government has proposed “safe harbor” standards in order to provide clarity: Companies offering plans that have a $3,500 deductible, a $6,000 cap on out-of-pocket costs, and premiums of $90 or less per month would put companies in the clear of any penalties. Under those standards, says Melchior, a low-income worker not eligible Medicaid has few good options:

He could take the employer’s plan — but if it’s a safe-harbor plan, it would cost, at minimum, $1,080 a year. And that’s before the deductible is even factored in. For someone who earns $28,725 a year, falling at 250 percent of the poverty level, these costs are sizeable.

Option two: He could shop around on the health exchange for an alternative. But because his employer provides a sanctioned plan, he’s disqualified from any subsidy he might have received to help offset costs. Even a very basic plan would cost up to $2,316 a year in premiums alone.

Option three: Forgo insurance altogether and pay the steadily increasing penalty to the federal government. In 2014, for an individual, that’s $95 for the year or 1 percent of household income, whichever is greater. But by 2016, it will rise to either $695 or 2.5 percent of household income. And that’s not even factoring in whether the worker has kids. In that case, he could face an annual penalty of $2,085 or more by 2016. […]

Before, many employers who paid by the hour offered limited medical plans. These policies often got a bad rap because of their lack of catastrophic coverage. But to their credit, they were inexpensive and contributed to health-care costs immediately, without workers needing to first meet a deductible.

Now, these low-wage hourly workers would be forced to spend at least $5,300 before their coverage really begins to benefit them. [National Review, June 17]

Posted on 06/18/13 11:09 AM by Alex Adrianson

To Do: Get the Word Out That Employees Have Options

• Get ready for National Employee Freedom Week, “a national effort to inform union employees of the freedom they have regarding opting out of union membership and making the decision about union membership that’s best for them.” The effort runs June 23 – 29 at participating organizations all around the country.

• Enjoy a James Bond-themed dinner with the folks at the Competitive Enterprise Institute. That’s the theme for CEI’s annual dinner this year. Rand Paul and Deirdre McCloskey will be there, too. Drinks—shaken, we presume—will begin pouring at 6 p.m. on June 20, at the J.W. Marriott in Washington, D.C.

Learn how to start a charter school. The Mississippi Coalition for Public Charter Schools will host a conference on the subject. The focus, of course, will be how to do it in Mississippi, but the program includes some folks from Arkansas and Tennessee who will offer general lessons from their experiences. The conference will be 1 p.m. – 5 p.m. on June 25 in Jackson, Mississippi.

• Find out how we can reclaim freedom, tradition, and the Constitution. Don Devine will speak at The Heritage Foundation about his new book, America’s Way Back on June 20 at noon.

Posted on 06/14/13 10:42 PM by Alex Adrianson

Meta-localypse Now?

Does the National Security Agency have all the secrets of our personal lives through its collection of metadata about phone and Internet communications? Not really. As Roger Pilon and Richard Epstein argue, reasonable people can disagree about how to balance national security and personal privacy, but the political process has struck a balance and the NSA’s activities are consistent with that balance:

In 1979, in Smith v. Maryland, the U.S. Supreme Court addressed that balance when it held that using a pen register to track telephone numbers did not count as an invasion of privacy, even in ordinary criminal cases. That’s just what the government is doing here on a grand scale. The metadata it examines in its effort to uncover suspicious patterns enables it to learn the numbers called, the locations of the parties, and the lengths of the calls. The government does not know—as some have charged—whether you’ve called your psychiatrist, lawyer or lover. The names linked to the phone numbers are not available to the government before a court grants a warrant on proof of probable cause, just as the Fourth Amendment requires. Indeed, once that warrant is granted to examine content, the content can be used only for national security issues, not even ordinary police work.

As the president said, the process involves some necessary loss of privacy. But it’s trivial, certainly in comparison to the losses that would have arisen if the government had failed to discern the pattern that let it thwart the 2009 New York subway bombing plot by Colorado airport shuttle driver Najibullah Zazi, an Afghan-American, who was prosecuted and ultimately pleaded guilty.

The critics miss the forest for the trees. Yes, government officials might conceivably misuse some of the trillions of bits of metadata they examine using sophisticated algorithms. But one abuse is no pattern of abuses. And even one abuse is not likely to happen given the safeguards in place. The cumulative weight of the evidence attests to the soundness of the program. The critics would be more credible if they could identify a pattern of government abuses. But after 12 years of continuous practice, they can’t cite even a single case. We should be thankful that here, at least, government has done its job and done it well. [Chicago Tribune, June 12]

Posted on 06/14/13 07:50 PM by Alex Adrianson

Wrong Way Snowden

Edward Snowden, leaker of the secrets of the National Security Agency, now resides in Hong Kong. As many commentators have pointed out, whatever other secrets reside in Snowden’s head will eventually belong to the People’s Republic of China, which owns Hong Kong.

Who knows what’s in store for Snowden? Remember Chen Guangcheng, the Chinese activist who exposed the brutality of China’s one-child policy and then fled to the United States in order to avoid regular beatings by state security agents? Here’s an update on how the People’s Republic is treating Guangcheng’s family who still live in China:

In November 2012, Chen’s nephew, Chen Kegui was sentenced to three years in prison for attacking, in self-defense, a group of local security police officers who broke into his home. In May this year, Chen Kegui was denied medical treatment for acute appendicitis. Prison authorities refused to relocate him to a prison hospital. When Chen Kegui’s father Chen Guangfu (the lawyer’s elder brother), applied for medical leave for his son. Chinese authorities denied the request.

Chen Guangfu himself was also recently attacked by two unidentified men.

Since Chen Guangcheng’s testimony before the U.S. House Foreign Affairs Subcommittee in April, his family has increasingly faced harassment, including death threats and stones thrown at their house. 

Last week, Chen’s mother, Wang Jinxiang had her Social Security payments and phone line cut abruptly—despite Chinese authorities having recently processed her and Chen Guangfu’s passport applications after months of deadlock, allowing them to apply for visas to visit Chen in the United States. [Epoch Times, June 13]

Posted on 06/14/13 07:44 PM by Alex Adrianson

Medicaid Expansion Is a Trap for Patients and Taxpayers

ObamaCare’s offer of 100 percent funding for states to expand Medicaid eligibility up to 133 percent of the poverty level is proving to be a tempting offer. Even some Republican governors are lining up to take the money. This week lawmakers in Arizona and Michigan pushed Medicaid expansion forward. Grace-Marie Turner and Avik Roy have identified 12 reasons states shouldn’t expand Medicaid. One key reason is that it will make health care worse:

Mountains of clinical literature show that patients on Medicaid have, on average, poorer access to care and poorer health outcomes than those with no insurance at all. The largest national study, conducted by the University of Virginia, examined outcomes for 893,658 individuals undergoing major surgical operations from 2003 to 2007. It found that patients on Medicaid were 13 percent more likely to die in the hospital after surgery than those with no insurance, even when adjusting for age, gender, income, region, and health status. Medicaid patients were 97 percent more likely to die than those with private insurance.

The Heritage Foundation has compiled a paper citing more than 20 studies showing that “Medicaid patients have worse access and outcomes than the privately insured” with evidence from state studies in California, Florida, Michigan, Massachusetts, and Maryland as well as numerous national studies.

Why is that?

Coverage is not the same thing as care. A study in Health Affairs found that in 2011, nearly one-third of physicians nationwide did not accept new Medicaid patients. This is largely because the Medicaid program generally pays doctors and hospitals far less than private insurers. Nationally, for every dollar primary care received from someone with employer-sponsored insurance in 2008, Medicaid only paid 52 cents.

As a result, few doctors can afford to take Medicaid, and patients, therefore, often lack a consistent source of outpatient care. […]

The ACA provides for a temporary two-year increase in Medicaid payments for primary-care physicians, but few observers believe that this temporary increase will lead physicians to increase their participation. [Internal citations omitted.] [Galen Institute, May 1]

But even the financial benefits to the states may prove illusory. State lawmakers who think they can opt out of Medicaid later when federal funding becomes less favorable are likely to be disappointed. Last year, the Supreme Court said the federal government couldn’t threaten to cut off all Medicaid funding to states that opted not to expand Medicaid, but it didn’t say that the federal government couldn’t cut off all funding to states that tried to opt out after accepting the federal offer. The Wall Street Journal explains the problem this way: “[T]here’s no evidence in the original law or the Supreme Court opinion that states can join or leave at their own whim. The logic of Justice Roberts’s opinion suggests that once states adopt new Medicaid, the program immediately becomes the old program for the purposes of the law and then states can’t leave.” [Wall Street Journal, March 15]

Posted on 06/14/13 06:24 PM by Alex Adrianson

Why Does the Federal Government Subsidize Farming?

If the point of farm programs is to make farmers better off than most American taxpayers, then they are performing that mission very well. This graphic is from a new paper by Vincent Smith:

And: “The annual failure rate for farms is 0.5 percent. The annual business failure rate, at 7 percent, is 14 times greater.” Meanwhile, Congress is working on a farm bill that would preserve most of the $23 billion in annual subsidies that farmers receive:

The House-passed budget for FY 2014 established a goal of cutting $3.4 billion per year from the farm bill, all from farm subsidies. While the House Agriculture Committee subsequently approved $3.8 billion in cuts in H.R. 1947, it reduced subsidies by only $1.8 billion; the remainder of the cuts came from nutrition programs. […]

The Senate Agriculture Committee’s farm bill also proposes termination of the Direct Payments and ACRE programs. But in their place, the committee would create a new and potentially more expensive shallow-loss program called Average Revenue Coverage (ARC). Under ARC, farming operations would seldom receive less than 89 percent of their expected income. [Mercatus Center, June 12]

Posted on 06/14/13 04:43 PM by Alex Adrianson

We Resemble that Remark

From Roger Ailes’s speech on accepting the Bradley Prize this week:

Of course, the country’s split politically. Democrats and Republicans can’t get along. And it is hard to figure out if it is ever going to get back together. But I heard a story about a guy who was in a hot air balloon. He was lost and he lowered his altitude. He spotted a man down below and descended a bit more and then called out to him. He said, “Excuse me, can you help me? I promised a friend I’d meet him an hour ago, and I don’t know where I am.” The man on the ground consulted his GPS and replied, “You’re in a hot air balloon approximately 30 feet above ground elevation at 2,346 feet above sea level. You are 31 degrees, 14 minutes north latitude; 100 degrees, 49 minutes west longitude,” and the guy in the balloon said, “You must be a conservative,” and he said, “I am. How did you know that?” He said, well, “Everything you told me is technically correct but I have no idea what to make of your information. The fact is I’m still lost – and frankly, you haven’t been very much help so far.” The guy on the ground yelled up: “You must be a liberal.” He said, “I am. How did you know that?” He said, “Well, you don’t know where you’re going or where you’ve been, you’ve risen to where you are on hot air. You made a promise which you have no idea how to keep. You expect me to solve your problem. The fact is you’re in the same place you were before we met and now it’s my fault!” [Fox News, June 12]

Posted on 06/14/13 03:54 PM by Alex Adrianson

State: Take Our Campaign Finance Laws to Court, and We’ll Sock You with Our Campaign Finance Laws

Defending First Amendment rights now counts as electioneering speech that can be limited under campaign finance laws. That, anyway, is the theory of Washington State’s Public Disclosure Commission.

Last year, thanks to a lawsuit brought by the Institute for Justice, the courts enjoined the PDC from enforcing an $800 cap on free legal work provided to the Recall Dale Washam committee. Starting a recall campaign in Washington State is so complicated that you can’t do it without a lawyer. Capping the amount of free legal work that can be given to a recall campaign would make launching a recall something that only wealthy people could afford to do—effectively preventing speech that is supposed to be protected by the First Amendment.

After the courts told the PDC it couldn’t cap the free legal work provided to the recall committee by the law firm Oldfield & Helsdon, the PDC then decided that the Institute for Justice’s work on the committee’s First Amendment lawsuit also counted as an in-kind contribution. As a result of that decision, the Recall Dale Washam committee faces the possibility of hundreds of thousands of dollars in fines and criminal sanctions.

If the PDC were to get its way, the Institute for Justice would then be on record in Washington State as having made a large campaign contribution, which would threaten the organization’s tax-exempt status. The precedent of counting legal work in civil rights litigation as a political campaign contribution would also threaten the work of many public interest law firms across the political spectrum. The Institute for Justice says it “has identified more than 100 cases in which a public interest law firm has represented a party in a civil rights case involving a political organization.”

On Thursday, the Institute for Justice filed suit against the PDC in Pierce County Superior Court. It will represent not only its clients from the recall effort but also, for the first time, itself.

[For more on the case, see “Washington’s Public Disclosure Commission vs. America’s Civil Rights Laws,” by the Institute for Justice, June 13, 2013.]

Posted on 06/14/13 01:49 PM by Alex Adrianson

How Are Those Global Warming Predictions Performing?

You be the judge. In the graph below, the colored lines are the predictions generated by various models that climatologists have developed to predict future temperatures. These are the models that predict even more global warming in the future. The thicker black line is the mean of those predictions. The blue squares and the green circles—all of which are below those trend lines—represent actual measurements taken from satellite and balloons.

[Graph by Roy Spencer, via Watt’s Up with That? June 6]

Posted on 06/13/13 03:05 PM by Alex Adrianson

If a Liberal Gets His Numbers Wrong and Paul Krugman Is There to Hear It, Does He Hear It?

Late last week Sen. Sheldon Whitehouse (D-R.I.) accused Heritage Foundation scholar Salim Furth of presenting meretricious testimony on whether there has been real or fake austerity in Europe. Meretricious is a fancy way of saying lying. New York Times columnist Paul Krugman thought he had one in his wheelhouse and took a big swing. He missed. Krugman reported the accusation without bothering to check the numbers himself and then piled on with some further unkind words about Heritage. It turns out, explains Steven Landsberg, that Whitehouse’s numbers were the ones that were shoddy:

There are a couple of legitimate reasons why Furth’s and Whitehouse’s numbers don’t agree. The first is that they’re for different time periods. Furth’s are for the years 2007-2012, while Senator Whitehouse’s are for the years 2009-2016. That’s right, 2016. Which brings us to the other reason these numbers differ: Furth’s come from the historical record, while Senator Whitehouse’s come from somebody’s ass. […]

It’s as if I’d announced plans to lose 30 pounds over the next year, and then promptly gained 10 pounds. Furth comes before Congress and says “Landsburg tells me he just gained 10 pounds”. Whitehouse says: “I can’t imagine where you got that number, because I have a number here from Landsburg that refers to a loss of 30 pounds—and that comes directly from Landsburg, who you say is your source. This makes me very concerned about your testimony, very concerned about where you’re getting these numbers…..” followed by eight minutes of innuendo suggesting that only sheer dishonesty can account for a discrepancy like this. [The Big Questions, June 7]

Currently, the last four commenters at Krugman’s blog all criticize him for rushing in without checking the facts. One of them wonders whether Krugman is big enough to admit he was wrong and apologize to Heritage. And these are New York Times readers.

Posted on 06/13/13 02:00 PM by Alex Adrianson

Somebody Is Cheating in the War of Ideas

Here, from Michael Lind, is a crazy argument that people on the Left are now taking seriously:

Why are there no libertarian countries? If libertarians are correct in claiming that they understand how best to organize a modern society, how is it that not a single country in the world in the early twenty-first century is organized along libertarian lines? […]

When you ask libertarians if they can point to a libertarian country, you are likely to get a baffled look, followed, in a few moments, by something like this reply: While there is no purely libertarian country, there are countries which have pursued policies of which libertarians would approve: Chile, with its experiment in privatized Social Security, for example, and Sweden, a big-government nation which, however, gives a role to vouchers in schooling.

But this isn’t an adequate response. Libertarian theorists have the luxury of mixing and matching policies to create an imaginary utopia. A real country must function simultaneously in different realms—defense and the economy, law enforcement and some kind of system of support for the poor. Being able to point to one truly libertarian country would provide at least some evidence that libertarianism can work in the real world. […]

If socialism is discredited by the failure of communist regimes in the real world, why isn’t libertarianism discredited by the absence of any libertarian regimes in the real world? [Salon, June 4]

While our outlook is conservative not libertarian, we do not imagine that a much more libertarian society is either impossible or that it wouldn’t be vastly preferable to the current regime. And since Lind’s argument has now gained a favorable mention from Washington Post columnist E.J. Dionne, we’ll wade into this debate to point out four major problems with Lind’s missive:

1. That an idea has never been tried (again, that’s Lind’s description) is not a demonstration that it wouldn’t work.

2. If we implemented only ideas that have been proven by experience to work, then we would never try any new ideas. As Ron Bailey points out, if humanity had adopted Lind’s attitude in the 17th century, we would never have given popular sovereignty, religious toleration, voting by women, and free trade a try. [Reason, June 7]

3. The test of an idea is whether it yields some marginal improvement in the state of human affairs, not whether it lives up to a critic’s checklist of policy preferences. Nor is the test of an idea whether it meets some fake standard, such as existing in a “true” or “pure” form. Would Lind count a 95 percent libertarian society as an exemplar of a mixed-economy welfare state? If so, we’d be happy to give that a try. Progress happens incrementally. We judge an idea by its effect at the margin. If Sweden’s school vouchers have been shown to increase learning across the country (they have), then that is a signal that additional market-based education reforms are worth pursuing. If countries with relatively more economic freedom have higher growth rates (they do), better environmental quality (they do), and better health (they do) than countries with less economic freedom, then that is strong evidence that a little more economic freedom would be better still.

Reframing the question as whether a libertarian utopia is achievable is a way of distracting us from the gains that individual free market reforms could achieve right now.

4. Finally, Lind is wrong to say that libertarians can’t explain why a purely libertarian society has never been created. Lind should acquaint himself with the works of James Buchanan and Gordon Tullock. From those writers he would learn that anti-market protections and subsidy programs are not only appealing to special interests but have political durability for reasons that have nothing to do with the merits of those policies. Redistribution and anti-competition policies are more likely to motivate narrow constituencies in favor than to motivate broad constituencies against the policies. The benefits of those policies are concentrated on particular industries or groups, while the costs are dispersed among all taxpayers and consumers. It may not pay a taxpayer to bother speaking out against an industry subsidy, but it very often pays particular industries to lobby for those subsidies. Thus, the policies that win out are often the anti-market policies that benefit special interests at the expense of society generally.

Of course, there is one other possible answer: Government-run schools do a very good job of preparing people to believe crazy things that statist thinkers write.

Posted on 06/11/13 04:51 PM by Alex Adrianson

To Do: Keep Tabs on the Modern Administrative State, Remember Your Rights

• Learn how the modern administrative state impacts liberty and the rule of law at the Federalist Society’s First Annual Executive Branch Review Conference, which will be held June 11, at the National Press Club in Washington, D.C. The program will begin at 8:30 a.m. and conclude at 2:30 p.m.

• On June 12, give a toast to George Mason for drafting the Virginia Declaration of Rights. The document, adopted June 12, 1776, by the Fifth Virginia Convention at Williamsburg, was the first constitutional protection of individual rights and later influenced the drafters of the United States Constitution.

• Discover just how much the federal government spends in various forms—grants, loans, loan guarantees, tax preferences—to subsidize different forms of energy production—renewables, coal, oil, natural gas, and nuclear—by visiting the Institute for Energy Research’s new Federal Energy Spending Tracker.

• Save the dates! Go or go not; there is no try when it comes to these events:
—the Victims of Communism’s Sixth Anniversary of the Dedication of the Victims of Communism Memorial, featuring Chinese dissident Yang Jianli, June 12 in Washington, D.C.;
—the Heritage Foundation’s panel discussion on The Legacy of Communism, at noon on June 12 in Washington, D.C.;
—the Bradley Prizes honoring Yuval Levin, Roger Ailes, Paul Clement, and Mitch Daniels for their outstanding contributions to the cause of free, representative government, June 12, in Washington, D.C.;
—the Competitive Enterprise Institute’s Annual Dinner, featuring Sen. Rand Paul (R-Ky.), June 20 in Washington, D.C.;
National Employee Freedom Week, “a national effort to inform union employees of the freedom they have regarding opting out of union membership and making the decision about union membership that’s best for them,” June 23 – 29 at participating organizations all around the country;
Freedom Fest, the largest gathering of free minds, July 10 - 13 at Caesars Palace in Las Vegas;
—and Cato University, July 28 – August 3 at the Cato Institute in Washington, D.C.

Posted on 06/07/13 06:19 PM by Alex Adrianson

Where the Economy Really Is

Don’t pop your champagne bottle yet. James Pethokoukis:

Annual US GDP growth, adjusted for inflation, has averaged an anemic 2.1% for the 15 full quarters of recovery, versus 5.1% during the same span after the severe 1981–82 recession.

As a result, the economy has yet to return to anywhere near its pre–Great Recession growth trend. If it had, the economy would be $1 trillion bigger today. […]

The economy has 2 million fewer private-sector jobs than it did at the January 2008 peak. […]

If not for a collapse in the labor-force participation rate — mostly due to weak labor demand rather than demographics, according to Goldman Sachs — the unemployment rate would be at least 9%, not 7.5%.

The broader U-6 jobless rate, which includes some discouraged workers and part-timers who would prefer full-time gigs — is just shy of 14% vs. 8% pre-recession. [AEIdeas, June 7]

And remember, the administration told us the jobless rate was going to be 5.1 percent in May 2013, not 7.6 percent.

[AEIdeas, June 7]

Posted on 06/07/13 05:00 PM by Alex Adrianson

The Marketplace Fairness Act Sticks Up for the Big Guy

Catesby Jones’s company, Peace Frogs, which sells T-shirts, mugs, and other fun stuff is one of the little guys that wouldn’t exist without the Internet. In a new video, Jones explains how the proposed Marketplace Fairness Act (AKA, the Internet Tax) would hurt his business: “Proponents of the Internet sales tax want to make me a tax collector for 9,646 tax jurisdictions. Their misguided efforts could make Peace Frogs at risk for audits by 46 states, the District of Columbia and countless other U.S. territories.”

Posted on 06/07/13 03:02 PM by Alex Adrianson

Meanwhile at the IRS, Audits of Individuals Have Been Skyrocketing

You might expect that the Internal Revenue Service would target those with higher incomes for tax audits. But for the wealthiest Americans, the odds of being subject to an IRS audit have tripled under President Obama’s watch, notes Kevin Hassett:

The question, says Hassett, is whether the IRS was just using income to pick targets, or whether it was trying to audit Republicans:  “The IRS has enough audit detail in its databases to reveal such political bias if it exists, and one can expect a flurry of data requests to flow from congressional Republicans in coming months. The tea-party scandal may well be just the tip of the iceberg.” [American Enterprise Institute, June 3]

Posted on 06/07/13 02:21 PM by Alex Adrianson

Maybe Fake Government Employees Are the Most Ethical

You couldn’t make this story up if you tried. Remember “Richard Windsor,” the e-mail alias used by former Environmental Protection Agency Administrator Lisa Jackson? Remember how Christopher Horner has had to sue the agency in order to get it to turn over those e-mails in response to his Freedom of Information Act requests? Eliana Johnson reports:

Documents released by the agency in response to a Freedom of Information Act request reveal that, for three years, the EPA certified Windsor as a “scholar of ethical behavior.” 

The agency also documented the nonexistent Windsor’s completion of training courses in the management of e-mail records, cyber-security awareness, and what appears to be a counter-terror initiative that urges federal employees to report suspicious activity. […]

Horner says that the EPA probably issued agency-wide training requirements for anybody who wished to maintain an active e-mail address, “never contemplating a false identity or fake employee would be created.” What appears to have happened, then, is that Jackson signed in, using her alias e-mail, to take the online courses for which the certifications were issued. “I’m unclear how grown men and women could think that it’s acceptable to have a nonexistent employee sign in as the test-taker [or to have an] administrator take required certification training in the name of a false identity,” Horner says. [National Review, June 3]

Posted on 06/07/13 01:53 PM by Alex Adrianson

Follow the Smears

So what was going on in the political world in August of 2010, the same month that the Internal Revenue Service started flagging tax exempt status applications containing the words “Tea Party” and “Patriot”? Kim Strassel’s timeline reminds us:

Aug. 9, 2010: In Texas, President Obama for the first time publicly names a group he is obsessed with […]: “Right now all around this country there are groups with harmless-sounding names like Americans for Prosperity, who are running millions of dollars of ads … And they don’t have to say who exactly the Americans for Prosperity are. You don’t know if it’s a foreign-controlled corporation.”

Aug. 11: The Democratic Congressional Campaign Committee sends out a fundraising email warning about “Karl Rove-inspired shadow groups.”

Aug. 21: Mr. Obama devotes his weekly radio address to the threat of “attack ads run by shadowy groups with harmless-sounding names. We don’t know who’s behind these ads and we don’t know who’s paying for them. […] The only people who don’t want to disclose the truth are people with something to hide.”

Week of Aug. 23: The New Yorker’s Jane Mayer authors a hit piece on the Koch brothers, entitled “Covert Operations,” in which she accuses them of funding “political front groups.” […]

Aug. 27: White House economist Austan Goolsbee, in a background briefing with reporters, accuses Koch industries of being a pass-through entity that does “not pay corporate income tax.” The Treasury inspector general investigates how it is that Mr. Goolsbee might have confidential tax information. The report has never been released.

This same week, the Democratic Party files a complaint with the IRS claiming the Americans for Prosperity Foundation is violating its tax-exempt status. [Wall Street Journal, June 6]

Posted on 06/07/13 12:55 PM by Alex Adrianson

Government Has Forgotten Its Place

Tuesday’s House Ways and Means Committee hearing on the treatment of conservative non-profits by the Internal Revenue Service featured some strong testimony that got dramatic and emotional at times. Here are some highlights:

John Eastman told how somebody at the Internal Revenue Service sent deatils about the donors of the National Organization for Marriage to an organization that works against traditional marriage. Then the Department of Justice told him that because of taxpayer privacy laws, it could not give Eastman any information about its investigation into the illegal disclosure.

Eastman later scolded Rep. Earl Blumenauer (D-Oregon) and Rep. Lloyd Doggett (D-Texas) for suggesting that it should be the job of the Internal Revenue Service to decide whether defending marriage and teaching about the Constitution serve the public good.

Becky Gerritson told how the Wetumpka Tea Party in Alabama had to wait 635 days before the Internal Revenue Service approved its application for 501(c)4 status. But before it granted tax-exempt status, the agency asked Gerritson to provide 90 pieces of information about her group, including names of donors, how much and when they had given, the names of volunteers and whether any had plans to run for office, and copies of all communications to any legislative bodies.

All Kevin Kookogey wanted to do was steep the young in Cicero and Touqueville, but the IRS wouldn’t give his group Linchpins of Liberty tax exempt status unless he named the names of the kids who would be reading that “subversive” literature.

Posted on 06/06/13 06:02 PM by Alex Adrianson

ObamaCare Then: Your Premium Will Be Less; ObamaCare Now: You Should Be Happy to Pay More

Last week, Avik Roy crunched the numbers to show that Californians who will be covered by the state’s health insurance exchange are in for some rate shock. For many, he found, the cost of health insurance will be more than double. [Forbes, May 30]

The state exchanges, remember, are part of ObamaCare’s plan for expanding health insurance coverage. Ezra Klein says it is not shocking at all that some people will pay more under ObamaCare’s new rules, since they’ll get better insurance and since somebody has to subsidize all the sick people who couldn’t get insurance before but now must be covered. Essentially, Klein agrees with Roy and other conservative critics on why health insurance will be more expensive under ObamaCare’s new rules, but thinks we should be willing to pay the higher premiums in order to get more stuff and more people covered. [Washington Post, June 1]

But there is at least one ObamaCare supporter who disagrees with Klein’s case that premium increases were only to be expected under ObamaCare. That would be presidential candidate Barack Obama, who said of his plan in 2007: “If you already have health insurance, the only thing that will change for you under this plan is the amount of money you will spend on premiums. That will be less.” [Andrew Kaczynski at Buzzfeed, June 3]

If only candidate Obama had been briefed by Ezra Klein in 2007! Then he could have had the correct sales pitch for his health care plan: “You’ll like the health insurance the government will design for you so much that you’ll be happy to pay more for it.” Or, as Avik Roy paraphrases liberal’s new argument: “It’s a good thing that ObamaCare doubles individual health insurance premiums.” [Forbes, June 3]

Posted on 06/04/13 07:00 PM by Alex Adrianson

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