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InsiderOnline Blog: July 2014

The Lego Movie Shows Why Central Planning Can’t Work

If you thought The Lego Movie had to be an anti-free market screed since it featured a character called President Business, then you were wrong. Let’s go to the video tape with Andrew Heaton and EconPop:

Posted on 07/30/14 05:24 PM by Alex Adrianson

Worker Freedom Is Good for Workers

Giving workers the right to not join a union may not be good for unions, but it is good for workers. Richard Vedder and Jonathan Robe find that there is considerable evidence that states with right-to-work (RTW) laws attract more capital than non-RTW states. More capital leads to higher wages and higher wages leads to a net-inflow of workers moving to RTW states from non-RTW states. RTW laws forbid making union membership or paying union dues a condition of employment. Vedder and Robe note:

Over the 35-year period [1977-2012], nationwide total employment grew by 71 percent. RTW states significantly outpaced this average, with employment growing by 105.3 percent. Non-RTW states lagged behind both, with an employment growth of only 50.0 percent. […]

[F]rom 2000 to 2009 more than 4.9 million native-born Americans moved from non-RTW to RTW states—an average of more than 1,450 persons per day. […]

A 2003 study by economist Robert Reed, then at the University of Oklahoma, helps clear some of the ambiguity by demonstrating that when one controls for the economic conditions of a state prior to its adoption of a RTW law, the relationship between RTW and wages is positive and statistically significant. Reed estimates that when “holding constant economic conditions in 1945—average wages in 2000 [were] 6.68 percent higher in RTW states than [in] non-RTW states.” […]

The total estimated income loss in 2012 from the lack of RTW laws in a majority of U.S. states was an extraordinary $647.8 billion—more than $2,000 for every American, including those in RTW states. [“An Interstate Analysis of Right to Work Laws,” by Richard Vedder and Jonathan Robe, Competitive Enterprise Institute, July 16]

Posted on 07/30/14 04:45 PM by Alex Adrianson

Toolkit Tuesday: Raising Transformational Gifts

Are you trying to figure out how to identify prospective givers of transformation gifts? Daniel Erspamer of the State Policy Network has written a brief outline of practices to follow. Here are the first three items:

Build & Maintain a Priorities Plan: It should be updated in real time and be your guide for your relationship-building efforts. Make sure it captures all of the supporters and probable supporters in your portfolio. A plan should be built for each. This also means keep an eye on gifts as they come in. Research new supporters in real time. Reevaluate often.

Execute Your Plan: Make your calls. Write your notes. Be creative. Measure your progress. Every day—this includes when you are on the road. Use your plans to keep you honest and on track in building real, meaningful, long-term and productive relationships with key investors.

Place the Order: You’ve got to ask for significant gifts. Relationships matter deeply, and they’re the foundation of it all. But, we are also responsible for paying to make dreams reality. Remember, we aim for transformational donor partners. Paint a powerful picture and be persuasive in asking for investments.

For the rest of Erspamer’s action plan, see “Eleven Irrefutable-ish Rules to Raise Transformational Gifts” in the March/April 2014 issue of SPN News.

Posted on 07/29/14 05:30 PM by Alex Adrianson

A Victory for the Right of Self-Defense

On Saturday, the United States District Court for the District of Columbia struck down the District of Columbia’s ban on carrying handguns outside the home. In the 2008 case of District of Columbia v. Heller, the Supreme Court struck down the city’s gun laws that effectively amounted to a ban on gun ownership. The city rewrote its laws to allow ownership, but made it illegal to carry guns outside the home. Tom Palmer, who works for the Atlas Economic Research Foundation and who was one of the original plaintiffs in the case that became Heller, sued with the help of the Second Amendment Foundation. He was represented by Alan Gura, the lawyer who argued Heller before the Supreme Court.

Judge Frederick J. Scullin, Jr., citing the Supreme Court’s recent precedents in Heller and MacDonald v. Chicago (2010) found that the Second Amendment right to keep and bear arms included the right to carry them outside the home for the purpose of self-defense. Here are the key passages from the opinion in Palmer v. District of Columbia:

As the Court noted in Heller, “Constitutional rights are enshrined with the scope they were understood to have when the people adopted them, whether or not future legislatures or (yes) even future judges think that scope too broad.” […]

As the court noted in Peruta, “[t]he Second Amendment secures the right not only to ‘keep’ arms but also to ‘bear’ them[,]”; and, as the Supreme Court explained in Heller, “[a]t the time of the founding, as now, to ‘bear’ meant to ‘carry[,]’” “Yet, not ‘carry’ in the ordinary sense of ‘convey[ing] or transport[ing]’ an object, as one might carry groceries to the check-out counter or garments to the laundromat, but ‘carry for a particular purpose—confrontation.’” According to the Heller majority, the “natural meaning of ‘bear arms’” was the one that Justice Ginsburg provided in her dissent in Muscarello v. United States, that is “‘wear, bear, or carry … upon the person or in the clothing or in a pocket, for the purpose … of being armed and ready for offensive or defensive action in a case of conflict with another person.’” Furthermore, “‘bearing a weapon inside the home’ does not exhaust this definition of ‘carry.’ For one thing, the very risk occasioning such carriage, ‘confrontation,’ is ‘not limited to the home.’” Moreover, it is beyond dispute that “the prospect of conflict at least, the sort of conflict for which one would wish to be ‘armed and ready’ is just as menacing (and likely more so) beyond the front porch as it is in the living room.” Thus, “‘[t]o speak of “bearing” arms within one’s home would at all times have been an awkward usage.’” In addition, the Heller Court stated that the Second Amendment secures “the right to ‘protect[] [oneself] against both public and private violence,’ … thus extending the right in some form to wherever a person could become exposed to public or private violence.”

Moreover, the Heller Court emphasized that the need for the right was “most acute” in the home, “thus implying that the right exists outside the home, though the need is not always as “‘acute.’” (“[T]he Second Amendment protects a personal right to keep and bear arms for lawful purposes, most notably for self-defense within the home.”)). However, Heller also pointed out that “laws forbidding the carrying of firearms in sensitive places such as schools and government buildings” is presumptively lawful. Finally, “both Heller and McDonald identif[ied] the ‘core component’ of the right as self-defense, which necessarily’ take[s] place wherever [a] person happens to be,’ whether in a back alley or on the back deck.” ][…]

Thus, having concluded that carrying a handgun outside the home for self-defense comes within the meaning of “bear[ing] Arms” under the Second Amendment, the Court must now ask whether the District of Columbia’s total ban on the carrying of handguns within the District “infringes” that right.

This question is not difficult to answer. As the Seventh Circuit stated in Moore v. Madigan, “[a] blanket prohibition on carrying gun[s] in public prevents a person from defending himself anywhere except inside his home; and so substantial a curtailment of the right of armed self-defense requires a greater showing of justification than merely that the public might benefit on balance from such a curtailment, though there is no proof that it would.” [Internal citations omitted.] [Palmer v. District of Columbia, Opinion of the Court, July 26, 2014]

Posted on 07/28/14 06:14 PM by Alex Adrianson

To Do: Learn What’s Wrong with Asset Forfeiture, the Federal Budget, and Economics; and Shoot Guns

Find out how the federal budget looks if you see it in a 30-year window. Hint: Not good. Sen. Ron Johnson (R-Wis.) will speak at the Cato Institute at noon on July 31.

Smart girls, go meet other smart girls at the Smart Girl Summit 2014. The conference “will bring together over 200 activists, bloggers, and community leaders” to talk about fighting the liberal agenda. And also shoot guns. The conference will be held August 1 - 2 at the Doubletree by Hilton Atlanta-Buckhead.

Discover how law enforcement agencies around the country are abusing asset forfeiture laws for their own profit. Rep. Tim Walberg, the Washington Post’s Radley Balko, and the Institute for Justice’s Scott Bullock will talk about how to rein in cops behaving like robbers at a Heritage Foundation talk. The even will begin at noon on July 29.

Students, learn how to champion the principles of freedom at your school and beyond. The top teachers in the conservative movement will share their wisdom with you at the Young America’s Foundation’s National Student Conservative Conference. The week-long conference will begin July 28 on the campus of the George Washington University in Washington, D.C.

Learn what’s wrong and what’s right with the economics profession. Peter Boettke will discuss his book Living Economics: Yesterday, Today, and Tomorrow at the next meeting of the National Economics Club. The talk will begin at noon on July 31 at the Chinatown Garden in Washington, D.C.

See if you can figure out whether Jim Geraghty’s new book is fact or fiction. Geraghty will talk about his book, The Weed Agency: A Comic Tale of Federal Bureaucracy Without Limits, at the John Locke Foundation in Raleigh, N.C. Geraghty’s talk will begin at noon on July 28.

Posted on 07/26/14 12:22 AM by Alex Adrianson

And Speaking of Socialism and Shaky Morals …

A crony capitalist’s attempt to get revenge via a defamation lawsuit against journalists who tell the truth has failed. Will Swaim of Watchdog.org reports:

A U.S. judge in Mississippi on Thursday threw out an $85-million lawsuit in which an electric car company founded by Virginia Gov. Terry McAuliffe alleged Watchdog.org had libeled the firm.

Judge Michael P. Mills said GreenTech Automotive failed to prove his Mississippi court had jurisdiction over Watchdog.org’s parent, Virginia-based Franklin Center, and Watchdog’s Virginia reporter, Kenric Ward.

The judge’s order noted that Watchdog’s “articles were not aimed at Mississippi” or even GreenTech itself. […]

“This lawsuit against our news organization was an act of intimidation from the beginning, and we simply refused to cave,” said Jason Stverak, president of Watchdog.org’s parent Franklin Center.

While campaigning for Virginia governor, McAuliffe claimed he founded GreenTech – evidence, he said, of his entrepreneurial skill and readiness to make Virginia a major player in the car business. But Watchdog investigations revealed that McAuliffe’s plan to build his plant in Virginia with government subsidies had been rebuffed by that state’s economic development officials, some of whom were concerned about GreenTech’s effort to raise cash through an unusual federal visa program. That process, called the EB-5 program, allows foreign nationals to obtain a U.S. visa in exchange for $500,000 investments in targeted U.S. businesses. GreenTech is one of those businesses.

On April 5, 2013, just days before GreenTech filed its libel suit against Watchdog, McAuliffe quietly disclosed that he had resigned four months before, on December 1, 2012. The retroactive resignation appeared to be an attempt to divorce McAuliffe from the company. [Watchdog.org, July 24]

Posted on 07/25/14 11:27 PM by Alex Adrianson

Socialism Was Both an Economic and a Moral Tragedy

A new study finds that socialism was hazardous to people’s moral health. Zenon Evans reports:

“The longer individuals were exposed to socialism, the more likely they were to cheat on our task,” according to a new study, “The (True) Legacy of Two Really Existing Economic Systems,” from Duke University and the University of Munich. The team of researchers concluded this after working with 259 participants from Berlin who grew up on opposite sides of the infamous wall.

When playing a dice game that could earn them €6 ($8), subjects originally from the East, which was for four decades under socialist rule, were more likely than their market economy counterparts in West to lie about how they fared.

The game required participants to roll a die after choosing the top or the bottom side and then recording the result. And then doing it again 39 more times. The participants were not required to say whether they had chosen the top or the bottom before writing down the result. The higher the tally, the bigger the payout. Systems of scarcity, the study authors theorized, “pressured or forced people to work around official laws.” [Reason, July 22]

It’s not hard to see how socialism might degrade people’s morals if you can imagine an economy in which everything is run like a Veterans’ Hospital.

Posted on 07/25/14 11:16 PM by Alex Adrianson

But What Does the Architect of ObamaCare Think?

Who could have thought the writers of ObamaCare really intended to limit the law’s subsidies to exchanges established by the states? That was the theory behind the plaintiffs case in Halbig v. Burwell; the plaintiffs won, and liberals have been busy accusing the D.C. Circuit Court of denying millions their subsidies because of a drafting error.

So who could believe that part of the bill wasn’t just a drafting error? How the about the MIT professor who helped write ObamaCare, Jonathan Gruber. Here’s what Gruber told an audience at the Noblis Innovation and Collaboration Center on January 18, 2012:

What’s important to remember politically about this is if you're a state and you don’t set up an exchange, that means your citizens don't get their tax credits—but your citizens still pay the taxes that support this bill. So you’re essentially saying [to] your citizens you’re going to pay all the taxes to help all the other states in the country. I hope that that's a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges. But, you know, once again the politics can get ugly around this. [For video of Gruber’s talk, see “Obamacare Architect Admitted in 2012 States Without Exchanges Lose Subsidies,” by Ryan Radia, Competitive Enterprise Institute, July 24. The quoted passage begins at 31:25 of the video.]

As Michael Cannon reports, “Gruber scarcely had time to plead temporary insanity” before another video of Gruber making similar comments emerged. Here’s what he told the Jewish Community Center of San Francisco eight days before his Noblis presentation:

A number of states have even turned down millions of dollars in federal government grants as a statement of some sort. They don’t support health care reform. I guess I’m enough of a believe in democracy to think that when the voters in states see that by not setting up an Exchange, the politicians in their state are costing state residents hundreds of millions and  billions of dollars that they’ll eventually throw the guys out. But I don’t know that for sure. And that is really the ultimate threat, is: Will people understand that, gee, if your governor doesn’t set up an Exchange, you’re losing hundreds of millions of dollars of tax credits to be delivered to your citizens? So that’s the other threat, is: Will states do what they need to do to set it up? [For video see: “Oops! ... Gruber Did It Again,” by Michael Cannon, Forbes, July 25]

Posted on 07/25/14 10:32 PM by Alex Adrianson

Whose Job Is It to Fix ObamaCare?

This week, two different U.S. district courts gave two different answers to that question. In Halbig v. Burwell, the D.C. Circuit Court declined to allow the Internal Revenue Service to deviate from the plain meaning of a section of the law that limits ObamaCare’s subsidies to exchanges established by the states. In King v. Burwell, the Fourth Circuit decided that the law viewed as a whole contained enough ambiguity that deference to the IRS’s expansion of the subsidy scheme was appropriate.

At issue in both cases was Section 36B of the Internal Revenue Code, created by the Affordable Care Act. That section creates refundable tax credits for the purchase of qualifying health insurance and specifies that the credits are available to those enrolled “through an Exchange established by the State […] .” The plain meaning of that provision is that tax credits are not available in the 36 states in which the federal government stepped in to create exchanges because the state choose not to do so.

More than just tax credits are at stake, though. ObamaCare also stipulates that the employer penalties apply when an employee receives subsidies through an exchange. No subsidies, no employer penalty. Further, without the subsidies, many would not be able to afford the insurance offered in the federal exchanges. Those folks would thus qualify for a hardship exemption from the individual mandate.

Thus, linking subsidies to state exchanges would seem to offer a way for each state to limit the reach of the law. The Internal Revenue Service, deciding that Congress could not have intended those results, offered the tax credits in all the ObamaCare exchanges. Four lawsuits ensued, and two of the cases were decided on Tuesday. The split between the Fourth Circuit and the D.C. Circuit means that the Supreme Court could take the case soon—unless the D.C. Circuit decides to rehear the case en banc and reverses the three judge panel.

The plaintiff’s theory of the case was developed largely by Michael Cannon of the Cato Institute and Jonathan Adler of the Case Western Reserve University School of Law. In a 2013 article in Health Matrix, Adler and Cannon laid out the case that Congress did indeed intend to restrict the subsidies to exchanges established by the states in order to induce the states to participate. [“Taxation without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA” Health Matrix, Spring 2013]

In striking down the IRS rule allowing tax credits in the federal exchanges, the D.C. Circuit emphasized it was bound by the plain meaning of the text unless the government could demonstrate that such a construction would lead to absurd results. The Court agreed with the plaintiffs that it was not absurd to see the restriction of subsidies to state-exchanges as a way of incentivizing state participation. The Fourth Circuit essentially put the burden of proof on the plaintiffs rather than the government, and ruled that the IRS’s interpretation was reasonable since it was consistent with the overall purpose of the law.

In reaching its decision, the D.C. Circuit quoted the words of Justice Thurgood Marshall from a 1985 Supreme Court case: “[T]he fact that Congress might have acted with greater clarity or foresight does not give courts a carte blanche to redraft statutes in an effort to achieve that which Congress is perceived to have failed to do.” The D.C. Circuit went on to conclude:

Within constitutional limits, Congress is supreme in matters of policy, and the consequence of that supremacy is that our duty when interpreting a statute is to ascertain the meaning of the words of the statute duly enacted through the formal legislative process. This limited role serves democratic interests by ensuring that policy is made by elected, politically accountable representatives, not by appointed, life-tenured judges.

Congress clearly failed to anticipate that the law’s disincentives for states to participate were much more powerful than the incentives. At least one court has said it is Congress’s job, not the court’s or the IRS’s, to fix the problem created by that failure of foresight.

Or to decide not to fix it, if it chooses. As Michael Cannon estimates, upholding the ruling for plaintiffs in Halbig “would free from potential illegal taxation more than ten times as many people as lose an illegal subsidy.” [Forbes, July 21] That sounds like a problem solved to us.

Posted on 07/25/14 09:39 PM by Alex Adrianson

How Are We Doing?

Some good news:

Some bad news:

These are just two of 31 indicators of cultural health that are now being tracked by The Heritage Foundation’s new publication, 2014 Index of Culture and Opportunity: The Social and Economic Trends that Shape America. The Index also tracks trends on abortion, fertility, marriage, divorce, religious observance, school choice policies, unwed child birth, dependence on welfare, and much more. Numerous policy experts have contributed commentary to the Index to help put these data into context. If you want to understand how the culture affects families, communities, and economic opportunity you should read through the Index. Keep this resource handy for discussing the issues with your friends, colleagues, and neighbors—and for encouraging policymakers to focus on the culture.

Posted on 07/25/14 02:30 PM by Alex Adrianson

John Blundell, R.I.P.

John Blundell, a builder of the liberty movement on both sides of the Atlantic, died on Tuesday at the age of 61. Steve Davies’ tribute describes Blundell’s numerous contributions to British and American free-market think tanks. These include serving as Presidents of both the Institute for Humane Studies and the Atlas Economic Research Foundation, where “he presided over a period of dynamic growth and innovation,” especially “at IHS where there was an expansion of existing programmes and the introduction of new ones.”

As President of the Charles Koch and Claude R. Lambe Charitable Foundation, Blundell helped develop “a systematic programme of targeted and goal driven philanthropy, not least in the direction of support and development to high-quality young scholars.” Davies writes: “Over the years these grants have supported a whole generation of people who have gone on to successful and productive careers in academia, the media and public policy and this is undoubtedly one of his most important legacies.”

In 1993 Blundell became Director General of the Institute of Economic Affairs, in which role he “steadied the ship and reaffirmed the historic core purpose and mission of the IEA: that is to affect the climate of opinion in the long term by producing high quality research and publications that influenced the creators of public opinion (academics, journalists, and writers).” Davies continues:

He wrote a number of pieces on how to effectively wage a ‘war of ideas’, which were collected and published by the IEA under the title Waging the War of Ideas in 2003. In 2009 he stepped down as Director General and returned to the US where he continued to be active as a speaker and author, most notably in his Ladies For Liberty: Women Who Made a Difference in American History.

John had a particular combination of qualities that made him an effective and important figure in the history of the freedom movement on both sides of the Atlantic. An excellent public speaker and lecturer, he was also a clear writer, producing a full length life of Margaret Thatcher and the aforementioned book on libertarian women and their contribution to the cause of liberty. He was a highly effective networker and brought together many people who would otherwise never have known each other. He was also a very effective fundraiser but he combined this with a very clear vision of how to use funds and donations to obtain a long-term impact. In contrast to too many people who think of fundraising and other activism simply as a way to support a current short-term campaign, John was a great institution builder who was always looking to convert current donations into something long term that would have a lasting impact. This could involve institutions, programmes and also talented individuals: there are many people all over the world now who owe much to his support and his identification of them as a cause worth investing in. John’s success in the area of institution and programme building can be seen in the number of institutions that he helped to develop or played a part in founding, including the Charles Koch Charitable Foundation, the Buckeye Institute, the Atlas Economic Research Foundation, the Fraser Institute, the Institute of Economic Studies, the Institute for Justice, and (through the Institute Development and Relations Committee of Atlas) many think tanks in various parts of the world. [Institute of Economic Affairs, July 23]

Posted on 07/25/14 12:34 PM by Alex Adrianson

Uber Is Pro-Uber, not Pro-Free Market

In spite of opposition from the taxi cabs and the regulators who make the taxi cartels possible, Uber and Lyft have brought more competition in transportation services to a number of cities around the country. Policy-wise, however, the companies are not asking cities for deregulation; rather, they have been asking regulators to recognize a new regulatory category for ridesharing services. The accommodation that Uber and Lyft are pushing could itself become a barrier to innovations just around the corner. Marc Scribner thinks Uber and Lyft might end up as the enemies of automated cars, for example:

Once fully automated technology is sufficiently reliable, it would be possible for anyone to schedule and dispatch their own empty car to someone else—whether for family, friends, or for hire. What if you could park, hike down a trail, and have your car pick you up on the other side? This will also enable entrepreneurs to easily form their own start-up networks for those who do not own or want to use their own car. […]

How will the lobbyists of Uber and Lyft respond when you and I are able to dispatch our cars to family, friends, and fares, while not being subject to costly insurance requirements, criminal background checks, and zero-tolerance drug and alcohol policies? Maybe they won’t mind. Or maybe they’ll react the way taxi cartels did. [Skeptical Libertarian, July 23]

Posted on 07/24/14 05:40 PM by Alex Adrianson

How Did the World Turn Against Israel?

Hamas puts its rocket launchers in schools, but Israel gets blamed for civilian deaths when it strikes back—or at least partially blamed. Max Fisher’s Voxsplaining last week is a representative example of this genre of blame-shifting: “This is the one thing that both Hamas and Israel seem to share: a willingness to adopt military tactics that will put Palestinian civilians at direct risk and that contribute, however unintentionally, to the deaths of Palestinian civilians.” [Vox, July 17]

How did we get to the point where Hamas’ barbarism has become an argument for Israel to not defend itself? Joshua Muravchik’s talk at The Heritage Foundation this week sheds some light on why many people are so quick to blame Israel when Hamas is clearly the aggressor.

Muravchik spoke about his book, Making David into Goliath: How the World Turned against Israel, which sought to explain why world opinion has shifted from being largely pro-Israel during the 1967 Arab-Israeli War to mostly anti-Israel today. The shift is partly explained by the death of Pan Arabism and rise of Palestinian nationalism. After the 1967 war, Israel was seen less as the underdog surrounded by hostile neighbors and more as the denier of another people’s national aspirations.

But that’s not the whole explanation, says Muravchik, who points to several other developments. In brief, these are: (1) The bombings, hijackings, and oil embargos during the 1970s put European governments into a mode of appeasing Arab and Muslim opinion, as Henry Kissinger observed when he tried to organize a Western response to dependency on Middle East oil. (2) There are many more Arabs and Muslims in the world than Jews; and there are many Arab and Muslim countries, but only Israel is a Jewish-majority country. That strength in numbers has allowed Arab and Muslim countries to turn the United Nations into an anti-Israel platform—at least at the sub-Security Council level. And (3) The cause of Palestinian nationalism has benefitted from a shift in the way progressives understand political struggle. Progressivism used to see the world through the lens of class struggle. Now the “West versus the rest,” anti-neocolonialism is the dominant paradigm, and the Palestinian cause fits neatly into that frame.

Muravchik has been thinking about these issues for a long time. His new book turned out to be pretty relevant just this week; unfortunately, it will probably be relevant in other weeks, too.

Posted on 07/24/14 03:37 PM by Alex Adrianson

You, Taxpayer, May End Up Paying the Cadillac Tax, Even If You Don’t Have Expensive Health Insurance

The so-called “Cadillac tax,” a tax on high-cost health insurance, is supposed to discourage the kind of overly generous first-dollar coverage that encourages too much health care consumption. That tax was deferred until 2018, but Roger Stark reports that private employers are already offering fewer plans that would be subject to the tax:

The non-partisan Congressional Budget Office (CBO) originally estimated the Cadillac Tax would generate $137 billion in new revenue over 10 years. Last year the CBO re-calculated the revenue at $80 billion, because private employers were already shifting to less generous health insurance plans.

But one kind of employer is an exception to the trend: The government itself:

United Benefit Advisors (UBA) surveyed 11,000 employers last year. The report found that government-employer annual health care costs increased at double the rate of health coverage in the private sector. The survey also showed that private-sector employees have larger co-pays and higher out-of-pocket expenses than public workers. Since the recession of 2008, wage freezes have been common for all workers, but government employees have been much more likely to receive increased compensation through expanded health benefits, even as public-sector salaries are held flat.

Stark also reports that the large public employee unions are already bargaining for retaining generous health care benefits in their next contracts, which will run past 2018. [Washington Policy Center, July 2014]

In form, the public employee unions bargain with the government, but such negotiations are often an exercise in self-dealing: Politicians vote for generous government worker benefits, and the government workers in turn vote for the politicians. Expect the Cadillac tax to add to state and local tax burdens.

Posted on 07/23/14 01:05 PM by Alex Adrianson

Where the Israel-Gaza Conflict Comes From

Israel’s critics would have you believe that Israel’s invasion of Gaza is a gross overreaction to a few rockets that are not doing much damage, anyway. But as Michael Mukasey explains, the conflict isn’t really about rockets at all; it’s about tunnels:

On July 5 Israeli planes damaged a tunnel dug by Hamas that ran for several kilometers from inside the Gaza Strip. The tunnel emerged near an Israeli kibbutz named Kerem Shalom—vineyard of peace.

That Israeli strike presented Hamas with a dilemma, because the tunnel was one of scores that the group had dug at great cost. Were the Israelis specifically aware of the tunnel or had their strike been a random guess? Several members of the Hamas military leadership came to inspect the damage the following day, July 6. A later official Israeli report said that the Hamas inspectors were killed in a “work accident.” But what if the Israelis had been waiting for the follow-up and struck again?

Hamas now saw its strategic plan unraveling. The tunnel network gave it the ability to launch a coordinated attack within Israel like the 2008 Islamist rampage in Mumbai that killed 164 people. Recall that in 2011 Israel released more than 1,000 Palestinian prisoners, more than 200 of whom were under a life sentence for planning and perpetrating terror attacks. They were exchanged for one Israeli soldier, Gilad Shalit, who had been taken hostage in a cross-border raid by Hamas. Imagine the leverage that Hamas could have achieved by sneaking fighters through the tunnels and taking hostages throughout Israel; the terrorists intercepted Saturday night were carrying tranquilizers and handcuffs.

If the Israeli strike on the tunnel near the Kerem Shalom kibbutz presaged a drive to destroy the entire network—the jewel of Hamas’s war-planning—the terrorist group must have been thrown into a panic. Because by this summer Hamas was already in desperate political straits. […]

It had lost the financial support of Egypt and could not get renewed support from Iran in the measure it needed. To some in the organization it appeared that Hamas had only one card to play—and on July 7 it played that card with rockets. [Wall Street Journal, July 20]

Posted on 07/21/14 05:33 PM by Alex Adrianson

To Do: Discover Where the Israel Hatred Comes From

Find out what has changed world opinion about Israel in the last 40 years. Joshua Muravchik will speak at The Heritage Foundation about his book Making David into Goliath: How the World Turned Against Israel. Muravchik’s talk will begin at noon on July 22.

Get ready for another election season by reviewing where the conservative movement has been. The Family Research Council will host a talk by George Nash on the post-World War II history of the American conservative movement. His talk will begin at noon on July 23.

Showcase your video-making talents and win $10,000. You have until July 31 to get your entries in for the Reason Magazine 2014 Video Awards, which “honors short-form, online video, film, and moving pictures that explore, investigate, or enrich libertarian beliefs in individual rights, limited government, and human possibilities.”

Learn what the history of gun control in the Third Reich teaches us today. Stephen P. Halbrook will talk about his book Gun Control in the Third Reich: Disarming the Jews and “Enemies of the State” at the Independent Institute Conference Center in Oakland, Calif. The event will begin at 6 p.m. on July 24.

Discover how the federal criminal justice system prosecutes American citizens for things that are not crimes and fails to hold prosecutors accountable for malfeasance. At the Cato Institute, Sidney Powell will talk about his new book Licensed to Lie: Exposing Corruption in the Department of Justice. Powell’s talk will begin at noon on July 24.

Get the conservative view from the European Parliament. The Pacific Research Institute will host a talk by Daniel Hannan, Conservative Party Member of the European Parliament Representing South East England. Hannan will speak at the Omni Hotel in San Francisco at noon on July 21.

Posted on 07/18/14 07:51 PM by Alex Adrianson

In Gaza, They Tore Down Paradise and Put Up a Launching Spot

Israel invaded Gaza because the folks running Gaza don’t want peace, Charles Krauthammer reminds us:

It was less than 10 years ago that worldwide television showed the Israeli army pulling die-hard settlers off synagogue roofs in Gaza as Israel uprooted its settlements, expelled its citizens, withdrew its military and turned every inch of Gaza over to the Palestinians. There was not a soldier, not a settler, not a single Israeli left in Gaza.

And there was no blockade. On the contrary. Israel wanted this new Palestinian state to succeed. To help the Gaza economy, Israel gave the Palestinians its 3,000 greenhouses that had produced fruit and flowers for export. It opened border crossings and encouraged commerce. […]

And how did the Gaza Palestinians react to being granted by the Israelis what no previous ruler, neither Egyptian, nor British, nor Turkish, had ever given them—an independent territory? First, they demolished the greenhouses. Then they elected Hamas. Then, instead of building a state with its attendant political and economic institutions, they spent the better part of a decade turning Gaza into a massive military base, brimming with terror weapons, to make ceaseless war on Israel.

Where are the roads and rail, the industry and infrastructure of the new Palestinian state? Nowhere. Instead, they built mile upon mile of underground tunnels to hide their weapons and, when the going gets tough, their military commanders. They spent millions importing and producing rockets, launchers, mortars, small arms, even drones. They deliberately placed them in schools, hospitals, mosques and private homes to better expose their own civilians. (Just Thursday, the U.N. announced that it found 20 rockets in a Gaza school.) And from which they fire rockets at Jerusalem and Tel Aviv. [Washington Post, July 17]

As Krauthammer points out, Hamas puts its own civilians in harm’s way because it believes civilian casualties will bolster its support around the world. To the extent that the media refuse to call Hamas to account for its aggressive behavior and shameful tactics, it is complicit in creating the incentives for Hamas to behave this way.

Posted on 07/18/14 05:49 PM by Alex Adrianson

Australia Has Repealed Its Carbon Tax

It was a bad policy on many levels, writes Sinclair Davidson:

Ironically, a tax is the theoretically correct market-based economic solution to a long-lived stock pollutant such as carbon dioxide. An emission trading scheme (ETS) – what the carbon tax was due to evolve into – is not. Politicians, however, have been loath to be seen to be introducing new taxes, and so had chosen an ETS mechanism over a tax. That is the first major defect of Australia’s carbon tax (and indeed of every other such mechanism).

The second major defect – arguably the most important – is that our carbon tax was a local tax. If global warming is a problem, then it requires a global solution. A local tax will do nothing to address global warming, apart from imposing high costs on the local economy.

Let’s not kid ourselves; the costs associated with the carbon tax are high. They are meant to be high. After all, avoiding the costs associated with the carbon tax was meant to drive our economy away from its reliance on fossil fuels, drive innovation in alternate energy, and avoid the apparently even higher mitigation costs of global warming.

That is why the tax needed to be repealed and not just kept as a revenue raiser[.] [The Drum, July 17]

Posted on 07/18/14 05:03 PM by Alex Adrianson

EPA Still Wants to Garnish Wages without a Court Order, but It’s Willing to Wait a Little Longer

Here is a small win for transparency, due process of law, and the idea of government playing by the same rules as everyone else:

The Environmental Protection Agency bowed to fierce criticism Wednesday and announced that it had hit the breaks on a fast-tracked plan to collect fines by garnishing paychecks of accused polluters.

The agency, which has come under withering attacks from Republican lawmakers for attempting a “power grab,” said it still intended to pursue the new authority to garnish wages without a court order. But now it will follow a more typical and longer review process. […]

The EPA quietly floated the collection power July 2 in a notice in the Federal Register, announcing it as a “direct final rule” that would take effect automatically Sept. 2 unless the EPA received adverse public comments by Aug. 1.

In response to adverse comments, the EPA has changed the “direct final rule” to a regular proposed rule and extended the comment period until Sept. 2, the official said. [Washington Examiner, July 16]

The problem with the rule, as Rob Gordon reported the day after it was published, was that it provided little opportunity for putative debtors to appeal the garnishment. Further, the EPA would have the power to garnish not just the paychecks of those with unpaid loan obligations but also the paychecks of those who are fined via EPA compliance orders. Those orders themselves have due process issues which are only compounded by the administrative garnishment set-up. [Daily Signal, July 3]

Concerned citizens should note, as the Examiner points out, that the EPA still intends to pursue the power to garnish paychecks without a court order. The EPA will now accept comments on the rule until September 2.

Posted on 07/18/14 04:28 PM by Alex Adrianson

A Grievance-Based Pedagogy

History is written, as Stan Evans says, by those who write history, but it will be the curriculum writers who decide what narratives citizens know if the Left succeeds in federalizing high school history. The latest push comes from the College Board, reports Stanley Kurtz:

[T]he College Board has created a lengthy and detailed “framework” for their AP U.S. History test. That framework effectively forces teachers to adopt an ideologically left-leaning approach to American history, heavily emphasizing our country’s failings while giving short shrift to our founding principles.

George Washington […] barely makes an appearance in the new AP U.S. History Guidelines. Figures like Benjamin Franklin and James Madison are completely omitted. The Declaration of Independence is presented chiefly as an illustration of the colonists’ belief in their own superiority. Slavery and the treatment of Native Americans are at center stage. At times, the presentation of the New Deal and the Reagan era seems to come straight out of a Democratic Party press office. If you want your child to be admitted to a top quality college, you may soon feel pressure to parrot this line.

And here is the connection to Common Core:

This attempt to nationalize a leftist American history curriculum by way of the College Board has been in the works for years. The Board made its move, however, shortly after selecting David Coleman, architect of the Common Core, as its new president. I and many others have been concerned that a de facto federalizing of the K-12 curriculum through the Common Core would create an opening for those seeking to nationalize leftist indoctrination in our schools. Coleman’s role in formally authorizing and supervising the AP U.S. History changes only heightens these concerns. Coleman hasn’t fully revealed his plans for linking up the Common Core and the College Board’s testing regime. At this point, however, Coleman has lost the benefit of the doubt.

If the new AP U.S. History framework is allowed to take root unopposed, we can expect analogous changes in other AP tests. The College Board could use its AP tests to effectively federalize nearly the whole of America’s high school curriculum, with all of it “aligned” to the Common Core. This, of course, would be a back-door way around the Constitution, which by withholding power over education from the federal government reserves control of it to the states. [National Review, July 7]

Posted on 07/18/14 03:36 PM by Alex Adrianson

Happy Birthday, Stan Evans

Sunday is Stan Evans’s 80th birthday, and we’d like to wish him a very happy one.

Evans was not only present at the creation of modern conservative movement, he was one of its creators. He wrote the Sharon Statement, adopted by Young Americans for Freedom as its statement of founding principles on September 11, 1960. It remains the best statement we know of the fusionist conservative philosophy. And as chairman of the American Conservative Union during the 1970s, he helped conservatives take control of the Republican Party and nominate Ronald Reagan for President in 1980.

Last August, Evans gave a talk at Hillsdale College’s Kirby Center in which he discussed the parallels between the behavior of the Internal Revenue Service under President Obama and the efforts by Presidents Kennedy, Johnson, and Nixon to use the IRS against internal enemies.

The talk is worth hearing again for its relevance to continuing controversies, but we’d like to draw out two other points he makes. The first is: “Somebody has said that history is written by the victors. I differ from that. History is written by people who write history.” The second is: “The answer to spin from the Left is not spin from the Right. […] If I have to support my point of view by suppressing some of the facts, there must be something wrong with my point of view. […] We need more honest journalists practicing journalism.”

Evans is an example of those credos in action. He has written several works of history that correct the liberal narrative with facts. In The Theme Is Freedom, for example, he showed how American freedoms came not from abstract, enlightenment theories but from the tradition of religious faith that informed the Founders’ ideas about politics. And in Blacklisted by History: The Untold Story of Senator Joe McCarthy and His Fight Against America’s Enemies, Evans dug into the archives of the Federal Bureau of Investigation and other official records to show that there really were agents of the Soviet Union seeking to harm the United States from within its government in the 1930s, 1940s, and 1950s—and that Joe McCarthy had the goods on them.

The other way Evans has lived those credos is by training many thousands of journalists—not to be right-wing ideologues but to do good journalism. He did this by founding the National Journalism Center in 1977. Tim Carney, John Fund, Michael Fumento, Maggie Gallagher, Dan Griswold, Greg Gutfeld, Steve Hayward, John Hood, William McGurn, and Martin Morse Wooster are just some of the journalists and writers trained by Evans and his team at the NJC.

For all that and more, thank you, Stan Evans, and happy birthday!

Posted on 07/18/14 01:24 PM by Alex Adrianson

Some Words from Goldwater

Fifty years ago Wednesday, Barry Goldwater delivered his speech accepting the Republican nomination for President in San Francisco. Here is a sampling of candidate Goldwater’s vision of a free America:

“[T]he America I envision in the years ahead will extend its hand in health, in teaching and in cultivation, so that all new nations will be at least encouraged to go our way, so that they will not wander down the dark alleys of tyranny[.]”

“[T]here must be room for deliberation of the energy and talent of the individual[.]”

“We must assure a society here which, while never abandoning the needy or forsaking the helpless, nurtures incentives and opportunity for the creative and the productive.”

“[T]his again will be a nation of men and women, of families proud of their role, jealous of their responsibilities, unlimited in their aspirations – a Nation where all who can will be self-reliant.”

“We do not seek to lead anyone’s life for him – we seek only to secure his rights and to guarantee him opportunity to strive, with government performing only those needed and constitutionally sanctioned tasks which cannot otherwise be performed.” [Video of the entire speech is available at C-Span.org.]

Many know Goldwater’s most famous line from that night: “I would remind you that extremism in the defense of liberty is no vice.” As Goldwater himself understood, an agenda based on the ideas of self reliance, free enterprise, and constitutionally limited government was considered extremist in 1964.

Posted on 07/17/14 07:20 PM by Alex Adrianson

More Evidence that Minimum Wages Cost Jobs

Proponents or raising the minimum wage keep claiming there is no evidence that minimum wage hikes cost jobs by pricing low-skilled labor out of the market. And those proponents keep being wrong.

According to a new analysis by Ben Gitis, the 13 states that raised their minimum wages in January all experienced lower job growth in the retail and restaurant sectors—the sectors most likely to employ minimum wage workers—than the states that did not raise their minimum wages. Job growth in the retail and restaurant sectors in those 13 states was 0.6 percent in May compared to 2.0 percent in the states that did not raise minimum wages. The 0.6 percent growth rate for May was also lower that the rate of job growth in the rest of the economy for those same states. According to Gitis, the 13 minimum wage hikes cost those states 129,000 jobs. [American Action Forum, July 8]

Posted on 07/16/14 06:28 PM by Alex Adrianson

Some Cities Welcome People with New Ideas; Others Don’t

A Tale of Austin and Chicago:

Posted on 07/14/14 03:57 PM by Alex Adrianson

To Do: Find Out How Dodd-Frank Is Going

Examine how the Dodd-Frank law has affected financial markets two years on. The Cato Institute will host a two-day conference on the subject at the Newseum in Washington, D.C. The event will begin at 10 a.m. on July 16.

Get some ideas on how to fix the U.S. Department of Veterans Affairs. A panel at the American Enterprise Institute will discuss the topic at 10 a.m. on July 17.

Confab with some of the top thinkers, leaders, and activists in the conservative movement at the Western Conservative Summit. Among the speakers: Gov. Bobby Jindal, Sen. Ted Cruz, Sen. Jim DeMint, Daniel Hannan, and John Andrews. The three-day summit will kick off on July 18 at the Hyatt Regency, Denver.

Hear the stories of American servicemen who risked their lives for their country. The Heritage Foundation will host Mark Lee Greenblatt, author of Valor: Unsung Heroes from Iraq, Afghanistan, and the Home Front. Greenblatt will speak at noon on July 17.

• Interns, learn how to fight corruption in Washington, D.C., from one of the best watchdog groups in the business. Judicial Watch will host a seminar that teaches you have to use freedom of information laws and other tools to investigate and uncover misconduct by government officials. The seminar will begin at 11 a.m. on July 18 at Judicial Watch in Washington, D.C. Register for the event by emailing: jwevents@judicialwatch.org.

See an inspiring movie about food cart entrepreneurs, and while you are at it enjoy some food truck fare, too. The James Madison Institute will screen the movie Dog Days at the All Saints Cinema in Tallahassee at 7:30 p.m. on July 18. Food trucks will be on hand at 6:30 p.m. to serve delicious BBQ.

Posted on 07/11/14 07:48 PM by Alex Adrianson

Illinoisans Also Vote with Their Feet

The one-way rate to rent a 26-foot U-Haul truck from Chicago to Houston is 6.2 times the one-way rate to rent the same truck from Houston to Chicago, reports Mark Perry, who surmises that there must be a lot of trucks stranded in Texas. [AEIdeas, July 8]

What could be the explanation for so many more people moving from Illinois to Texas than from Texas to Illinois? J. Scott Moody and Wendy Warcholik have written a comprehensive report on Illinois’ migration patterns. They find that the folks leaving Illinois are going to states where estate taxes are lower (67 percent lower, as weighted by people moving) where union membership is lower (43 percent lower, as weighted by people moving) and temperature are higher (20 percent higher, as weighted by people moving). [“Policy Lessons from Illinois’ Exodus of People and Money,” Illinois Policy Institute, July 2014]

Some other comparisons: Illinois has the least trusted state government in the country, whereas Texas has one of the top-seven trusted state governments in the country, according to Gallup. Illinois ranks much worse on two widely cited-measures of economic freedom: the 2014 ALEC-Laffer Economic Outlook Rankings and the Mercatus Center’s 2013 Economic Freedom Rankings. Illinois is 48th and 37th respectively, in those rankings; Texas is 13th and 14th. [See: “Illinois Residents Least Trusting of Their State Government,” by Jeffrey M. Jones, Gallup, April 4, 2014; Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, 2014, by Arthur Laffer, Stephen Moore, and Jonathan Williams; “Freedom in the 50 States 2013,” Mercatus Center. Also: “Why Are Some State Governments More Trusted than Others?” InsiderOnline, May 2.]

Posted on 07/11/14 05:44 PM by Alex Adrianson

The Environmental Protection Agency Wants Even More Administrative Power over Citizens

The Environmental Protection Agency has plans to garnish wages without a court order. That’s what it said in a Federal Register notice published on July 2. As Rob Gordon reports, the point of the order is not merely to obtain repayment of loans and such to the federal government, but also to enforce compliance with EPA regulatory orders by making it easier to collect fines that are themselves imposed only by administrative orders. Consider, for example, the case of Andy Johnson, a welder in Unita County, Wyoming:

The EPA issued an administrative order demanding that he destroy a pond he painstakingly built on his own property or face serious repercussions. The EPA has threatened Johnson with fines in the amount of $75,000 per day for violating the Clean Water Act. The pond’s waters are not polluted and the pond is much appreciated by wildlife, given the arid nature of Unita County. Johnson even sought regulatory approval from the state for his private effort to improve the environment. He did not however get a permit from the Army Corps of Engineers and consequently finds himself under the EPA’s thumb. Wyoming Senators Mike Enzi and John Barrasso joined with Louisiana’s David Vitter to issue a letter to the agency stating that the “EPA appears more interested in intimidating and bankrupting Mr. Johnson than it does in working cooperatively with him.” [Daily Signal, July 3]

And as David Addington notes in comments submitted to the EPA on behalf of The Heritage Foundation, the new EPA rule on garnishment stacks the deck in various ways against putative debtors seeking to appeal a garnishment order. In particular, the proposed procedures require the appellant to prove that the EPA’s position is wrong, rather than placing the burden of proof on the EPA. The EPA, by the way, is accepting comments on the notice until August 1.

Posted on 07/11/14 04:52 PM by Alex Adrianson

ObamaCare Still Has Fiscal Problems, Too

Ever since Democrats passed ObamaCare on a party-line vote, they’ve been running away from the parts of the law that were supposed to finance the new spending: the long-term care program (repealed), the individual mandate (postponed), the employer mandate (postponed), cuts to Medicare Advantage (dropped). Charles Blahous writes that a fiscal disaster is unfolding:

The ACA was enacted in 2010 with the promise of reducing the federal budget deficit while expanding health insurance coverage. Nearly lost amid the recent press cheerleading over ACA enrollment figures is that this promise has disintegrated, and now no one—including, notably, the Congressional Budget Office—can say how much fiscal damage the ACA will ultimately cause. All we know for certain is that many of the savings provisions designed to pay for it have been shelved thus far.

CBO currently estimates that the ACA’s coverage provisions will cost the federal government $92 billion a year by FY2015. This is roughly 0.5 percent of projected U.S. economic output for 2015, well exceeding the relative costs of Social Security and Medicaid at similar points in their histories. (The amount falls just short of the proportion of GDP absorbed by all of early Medicare.) Worse, the federal fiscal position was far weaker when the ACA was passed than when Social Security, Medicare, and Medicaid were created.

Troubling though the ACA’s startup costs are, they represent only the tip of the fiscal iceberg that will be the fully phased-in law. CBO projects that its annual costs will hit $200 billion by FY2020, or nearly 0.9 percent of GDP. Yet this assumes that lawmakers will be content to allow the ACA’s health insurance subsidies to grow more slowly than low-income beneficiaries’ health care costs, as the law now stipulates. Thus there is every reason to believe that the ACA’s eventual costs will far exceed initial estimates, as happened with Social Security, Medicare, and Medicaid. [Weekly Standard, July 14]

As Blahous says, it’s pretty much equivalent to what would have happened had Congress and President Roosevelt decided to roll back the payroll tax in 1937 while leaving Social Security benefits in place.

Posted on 07/11/14 04:28 PM by Alex Adrianson

There Is Still Bias in Higher Education

None of the top 50 colleges assign any conservative books in their reading programs for incoming freshman, finds a new survey by the Young America’s Foundation:

YAF surveyed the top 50 schools as noted by Forbes, and of the schools that institute a freshman reading program, no conservative books were assigned to incoming students over the past three years. The purpose of required reading, according to many of the schools implementing them, is to foster a sense of community among students through igniting university-wide discussions. Not surprisingly, YAF found that many of the “required” books only offered left-wing perspectives on topics such as race, feminism, socialism, inequality, and wealth redistribution. [Young America’s Foundation, July 2]

Posted on 07/11/14 03:41 PM by Alex Adrianson

How Do You Like Your Foreign Policy Now?

A short video report on how the Obama foreign policy is going:

[For some analysis see: “Why the Obama Foreign Policy Has Been a Disaster,” by Mackubin Thomas Owens, The Insider, Spring 2014.]

Posted on 07/11/14 01:18 PM by Alex Adrianson

Big Ideas

The Wall Street Journal is marking its 125th anniversary by asking its contributors to “propose one change in American policy, society or culture to revive prosperity and self-confidence.” There are more than a few good ideas on the list, but here are three that can’t be repeated often enough:

“Look to the states, not to Washington,” says Goldwater Institute President Darcy Olsen says:

The Framers understood that the rival of power is power, and the only power sufficient to rival Washington is the collective body of the 50 states. The Founders didn’t give us one constitution—they gave us 51. The Constitution provides a floor for freedom, not a ceiling. State constitutions can augment freedoms far above the federal baseline.

Skeptics say federalism is dead, states have become too dependent on Washington. That is too often true—but not always. When the Supreme Court gutted private-property rights with the Kelo decision in 2005, the solution didn’t come from Washington. Instead, 45 states strengthened their own constitutional protections. When the Obama administration threatened to impose “card check” rules to unfairly help unions organize businesses, the solution didn’t come from Washington. Instead, states drew up laws that are now protecting millions of workers.

“Pull the plug on crony capitalism,” says Hewlett-Packard CEO Carly Fiorina:

As Washington continues to expand overly complex and expensive tax codes and regulations, written by an alliance of corporate lawyers and government bureaucrats, the victims are the small-business owners who are the country’s backbone. As a result of these regulations-on-steroids, innovation, business creation and job growth are being stifled.

Who is looking out for innovative newcomers as well as the neighborhood dry cleaners, the corner taqueria, the coffee shop and the lawn-care company? Not Washington. Government bureaucracies like complexity because it keeps them busy and funded. Americans can see that too much government actually causes the problems that big new programs are meant to solve. Wall Street bailouts, the housing crisis and the tragedy of ObamaCare are just a few examples of overbearing government.

More small businesses are failing and fewer are starting than at any time in the past four decades. This trend must be reversed. Until it is, our economy will not produce the jobs we need, nor will we be ready to lead.

“Deregulate labor markets now,” says Hoover Institution fellow Richard Epstein:

Wide-ranging deregulation of labor markets would produce an immediate economic jolt without costing taxpayers a dime. Labor markets are hobbled every day by ever-more-intrusive regulations and taxes, with two costly consequences. First, they reduce the opportunities for gains from trade between employers and employees. Quite simply, if the cost of regulatory or tax compliance exceeds the joint gains from the transaction, the deal is off. Second, these regulations add huge administrative expenses, both in the direct costs of government enforcement and in private compliance costs. We should never spend tax dollars to reduce productive activity.

So we have to bid farewell to the egalitarian mantra that we can lift the nation up out of its doldrums by raising minimum wages to living wages, by tightening overtime regulation, by strengthening public and private unions, by expanding family-leave protection, by continuing with aggressive enforcement of the antidiscrimination laws based on race, sex and age, by imposing a health-care mandate on employers, and by extending unemployment benefits. The tragic truth is that these feel-good measures hit hardest at the bottom end of the labor markets, especially minority teenagers desperate to gain work experience. Employers won’t hire if they think that reforms are short-term gimmicks. Protectionist policies never work. But long-term stable reform could and should reverse those dismal unemployment and labor-participation figures. [Wall Street Journal, July 7]

Happy 125th, Wall Street Journal!

Posted on 07/10/14 02:03 PM by Alex Adrianson

What’s So Compelling about Mandated Employer-Provided Health Care?

The Religious Freedom Restoration Act says government may impose a substantial burden on religious practice only if the burden is the least restrictive means of furthering a compelling government interest. Richard Epstein writes that in last week’s Hobby Lobby decision, neither the majority nor the dissenters on the Court adequately assessed the question of whether a compelling government interest was being served by the Department of Health and Human Services contraception mandate:

Unfortunately, Justice Alito simply assumes that the state has a compelling state interest in women’s healthcare, and jumps right to the question of whether the ACA adopts the “least restrictive means” toward that end. In her dissent, Justice Ginsberg insists, without opposition, that women’s health is a compelling state interest. Her argument is, however, wrong at every level. RFRA’s legislative history makes reference to two early Supreme Court cases, Sherbert v. Verner (1963) and Wisconsin v. Yoder (1972), which set a high bar against any claim of a compelling state interest. For example, Sherbert makes explicit reference to NAACP v. Button (1963) in which Justice Brennan resorted to a tough compelling state interest test to protect the NAACP against Virginia’s race neutral anti-solicitation law. RFRA carries that tough standard over to cases of religious liberty.

A more detailed analysis of the history of health and safety regulations confirms this interpretation. Today, by common consent, constitutional law cannot be used to strike down the ACA’s massive interference with freedom of contract. Before the New Deal, however, the applicable standard provided that the constitutional protection of freedom of contract yielded to federal or state regulation that used reasonable means to advance the health and safety of employees under the government’s residual police power. But not one decision during that period ever concluded that the police power extended to protecting personal healthcare unrelated to the workplace activities. Thus, states could pass a worker’s compensation law to deal with job-related injuries, or impose restrictions on exposure levels dangerous to female reproduction. But they could not require any employer to supply its female (or male) employees with a full set of healthcare services unrelated to their job. Only the constitutional repudiation of the pre-New Deal cases on liberty of contract made the ACA possible, for its limitations on contractual freedom are tested under the toothless rational basis standard.

Rational basis has no place under the RFRA, which requires the state to show that the supposed compelling interest in women’s healthcare justifies a statutory mandate that disrupts all preexisting practices whereby firms did not supply the mandated contraceptive services. But women’s healthcare is no more a compelling interest than men’s healthcare. The elaborate ACA legislative findings that uninsured women need healthcare fail miserably to explain the employer’s duty to subsidize anyone’s healthcare. Neither the ACA’s legislative history nor the Justice Ginsburg’s dissent identifies any systematic market disruption remotely comparable to natural disasters, domestic uprisings, and foreign invasions. The orderly private market for contraceptive services negates any government necessity to make employers pay for them. Nothing in the RFRA, of course, prevents the state from providing those benefits out of general revenues. [Hoover Institution, July 7]

Another point that both the majority opinion and the dissents seemed to assume is that mandating employers include contraception in employee health plans leads to cost-free access. But, as we pointed out last week, this notion is an economic illusion. [InsiderOnline.org, July 4] Here is liberal health policy wonk Uwe Reinhardt explaining the problem:

Imagine yourself in a bar where a pickpocket takes money out of your wallet and with it buys you a glass of chardonnay. Although you would have preferred a pinot noir, you decide not to look that gift horse in the mouth and thank the stranger profusely for the kindness, assuming he paid for it. You might feel differently, of course, if you knew that you actually had paid for it yourself.

Persuaded by both theory and empirical research, most economists believe that employer-based health insurance is an analogue of this bar scene.

The argument is that the premiums ostensibly paid by employers to buy health insurance coverage for their employees are actually part of the employee’s total pay package – the price of labor, in economic parlance – and that the cost of that fringe benefit is recovered from employees through commensurate reductions in take-home pay. [New York Times, July 1]

In a competitive labor market, employers who choose not to offer benefits that other companies provide will have to be more generous in salary in order to retain employees. This reality leads Reinhardt to knock the court’s majority for assuming that employers suffer an economic burden because of the mandate. He writes that “the case should help puncture the illusion that employer-provided health insurance is an unearned gift bestowed on them by the owners and paid with the owners’ money, giving those owners the moral right to dictate the nature of that gift.”

Actually it’s the government that dictates the nature of the gift while forcing employers to participate in the transaction. That forced participation—forced on pain of a paying a penalty for not providing the coverage—is the burden from which the owners of Hobby Lobby and Conestoga Wood sought relief. Forcing someone to choose between doing something that their religious faith says they cannot do and paying fines of tens of millions of dollars per year does impose a substantial burden on their religious practice.

The point about who’s really paying supports rather than refutes the conservative position. The conservative majority ruled against applying the mandate to Hobby Lobby and Conestoga Wood because it saw other less restrictive means of achieving the government interest. It didn’t really examine whether there is a connection between the policy and the government interest. But if the underlying economic reality isn’t changed by the existence of a mandate, then the mandate does not further the stipulated government interest of ensuring cost-free access. And in order for a policy to be the least restrictive means of furthering an alleged compelling government interest, it must be within the universe of policies that actually further that interest.

Posted on 07/09/14 01:44 PM by Alex Adrianson

Does Contraception Kill?

Some critics have argued that the religious objections of the Green and the Hahn families (owners, respectively, of Hobby Lobby and Connestoga Wood) to four of the 20 contraception services mandated by the Department of Health and Human Services are based on faulty science. Those beliefs, said the Supreme Court last week, were entitled to protection under the Religious Freedom Restoration Act.

Jen Gunter at New Republic presents the view of the critics, arguing that the science shows that the drugs Plan B and Ella have no mechanism of action other than preventing sperm and egg from meeting. She further argues that there is no evidence that IUDs adversely impact the likelihood of a fertilized egg from implanting.

Donna Harrison, like Gunter, is an obstetrician-gynecologist, and she disagrees. Here is the key bit from her dissection of Gunter’s views published at National Review

[Gunter] admits that IUDs change the lining of the uterus. Changing the lining of the uterus, by setting up an inflammatory reaction in the lining, is in fact the principal mechanism of action by which IUDs prevent embryos from implanting. And preventing an embryo from implanting kills the embryo. Thus the author contradicts the very claim that she is making. To say blithely that there is a higher “miscarriage” rate is to admit that the presence of an IUD causes loss of a pregnancy after implantation, which by any definition is called an abortion. So IUDs can end a human life, as the owners of Hobby Lobby and Conestoga Wood have claimed, and as the author admits.

And about Ella:

Ella is the same kind of drug as the abortion drug RU-486: They are both of the same class of drugs, called progesterone blockers. And they both are equally potent in blocking the action of progesterone, a hormone that a woman’s ovaries make to be able to nourish a pregnancy. If a woman takes RU-486 or Ella and hasn’t released an egg, it can delay egg release. If a woman takes RU-486 or Ella after she releases an egg, however, it can cause the embryo to die, either by preventing a woman’s ovary from making enough progesterone or by blocking the action of progesterone on the lining of the uterus, causing the mother’s side of the placenta to disintegrate. In fact, RU-486 is used in China as “emergency contraception.”

The evidence that Ella can kill embryos, even after they have implanted, comes from the research submitted to the FDA when Ella was being considered for approval. Two of these research studies looked at what happened to the pregnancies of women who got pregnant after taking the drug. In the first, five of six pregnancies with known outcomes ended in “miscarriage” for women who did not choose to abort. In the second study, four of six women “miscarried,” and the remaining two were lost to follow-up. “Miscarriage” means an embryo died. That’s how RU-486 and Ella work. They kill embryos.

In fact, this evidence was so damning that one of the FDA advisory panelists, Scott Emerson, a professor of biostatistics at the University of Washington, raised the point that the low pregnancy rate for women who take Ella four or five days after intercourse suggests that the drug must have an “abortifacient” quality. [National Review, July 8]

In evaluating freedom of religion claims, courts are not supposed to examine whether religious beliefs are valid but simply whether they are sincerely held. According to Harrison, however, the Greens and the Hahns have a more accurate understanding of the science then their critics.

Posted on 07/08/14 06:31 PM by Alex Adrianson

To Do: Go to Las Vegas, Learn about Liberty and Global Warming Alarmism

Find out if big brother is here. That’s the theme of FreedomFest 2014, where you’ll also hear science fiction author David Brin, Whole Foods CEO John Mackey, author P.J. O’Rourke, Forbes Editor-in-Chief Steve Forbes and many other heavy hitters for liberty. FreedomFest 2014 will kick off at Planet Hollywood Las Vegas at 4 p.m. on July 9.

Discover whether man-made global warming will be harmful to animals, plants, and human welfare. Leading scientists from around the world will converge on Las Vegas for the Heartland  Institute’s 9th International Conference on Climate Change. The conference will run from July 7 to July 9 at the Mandalay Bay Resort and Casino.

Learn what the Supreme Court got right and wrong in the term it just concluded this week. The Heritage Foundation will host panel discussions reviewing the cases. The event will begin at 11 a.m. on July 8.

Students, meet other freedom-loving students from around the country at the Young America’s Foundation’s National High School Leadership Conference. You’ll also hear from top thinkers and strategists in the conservative movement. The conference will be held at the National 4-H Youth Conference Center in Chevy Chase, Md., from July 9 to July 12.

Applaud the Clare Boothe Luce Institute’s 2014 Woman of the Year Winner, Katie Pavlich. Pavlich will accept the award and also talk about her new book Assault and Flattery: The Truth about the Left and Their War on Women at the Capitol Hill Club in Washington, D.C. The event will begin at 4 p.m. on July 10.

Learn how our health care system isn’t designed to cover the cost of short-term life-saving therapies currently in development. A panel at the American Enterprise Institute will discuss ways to fix that problem. The event will begin at 7:45 a.m. on July 11.

Posted on 07/04/14 02:20 AM by Alex Adrianson

Unions Can No Longer Unionize People Who Are Not Even Employees

That’s what the Supreme Court said on Monday in Harris v. Quinn, the big case out of Illinois. Paul Kersey of the Illinois Policy Institute reports:

During the administration of disgraced ex-Illinois governor Rod Blagojevich, the Service Employees International Union (SEIU) saw an opportunity to expand by organizing two groups of people: home-based caregivers in the state’s Medicaid program and daycare providers.

Neither group had previously been considered state employees, and for good reason: Most of these caregivers watched over disabled relatives at home, and the daycare providers were small businesses that took in children from low-income families that received state child-care subsidies. Calling people in either group “state workers” just because they took advantage of a public social program would be as crazy as classifying food stamps recipients as state employees.

Nevertheless, the governor cooperated, and soon the union was collecting $20 million in dues each year from the two groups.

Then the SEIU found itself on the wrong side of Pamela Harris, a Chicagoan caring at home for her some Josh. Kersey continues:

Josh, was born with a rare genetic disorder and faced severe physical and cognitive struggles. Rather than put Josh in a state institution or an adult daycare facility, Pam stayed home full time to take care of him and received a Medicaid benefit administered by the Illinois state government of roughly $25,000 a year.

Harris did not want her home to be a union workplace, so she rallied other families like hers and beat back the SEIU’s advances. But government unions in Illinois are nothing if not determined, and Harris knew they would soon try to force her again to join the union. To end the scheme once and for all, she joined with other parents and caregivers who already paid forced dues to file a lawsuit. […]

The state of Illinois and the SEIU claimed that the union was entitled to represent—and receive financial support—from home-based caregivers. But this week the U.S. Supreme Court rejected the SEIU’s theory of union organizing. The court echoed a point that the Illinois Policy Institute made in our amicus brief, arguing that as a result of mandatory dues, participants in the state’s Medicaid program were inevitably forced to either support the union’s political speech or withdraw from the program. Paying dues to a union should not be a condition of receiving help from the state to care for a loved one. [USA Today, June 30]

Posted on 07/04/14 01:07 AM by Alex Adrianson

The Method in the Left’s Madness

There was a lot of misinformation peddled about the Supreme Court’s ruling in Burwell v. Hobby Lobby this week. Liberals claimed variously that corporations now have more rights than people, that they can prevent women from getting birth control, that they can refuse to cover any medical procedure at all, and that they will soon be opting out of minimum wage and anti-discrimination laws. Justice Ruth Bader Ginsberg herself expressed some of those views in her dissent. Other commentators even wondered whether paying taxes could become optional. For a sampling of the idiocy, see in particular the rundowns from James Taranto [Wall Street Journal, July 2], Megan McCardle [Bloomberg View, July 2], and Sean Davis [The Federalist, June 30].

Of course, contraception is still legal. It might even still be free (to the user at the point of delivery, that is) if the government extends to for-profits the accommodation it created for non-profits or decides to finance the benefit directly. So what’s all the outrage about? Julian Sanchez opines that it’s about cultural signaling:

The outrage does make sense, of course, if what one fundamentally cares about—or at least, additionally cares about—is the symbolic speech act embedded in the compulsion itself. In other words, if the purpose of the mandate is not merely to achieve a certain practical result, but to declare the qualms of believers with religious objections so utterly underserving of respect that they may be forced to act against their convictions regardless of whether this makes any real difference to the outcome. [Cato Institute, June 30]

Contrary to the Left’s fears, the Religious Freedom Restoration Act is not a blank check for anybody to opt out of any law simply by checking the religion box. Not any burden on religious practice is forbidden, but only substantial ones. And even substantial burdens may be imposed when there is a compelling government interest that cannot be served with a less restrictive means.

(By the way, the Religious Freedom Restoration Act was passed in 1993 by a bipartisan vote—unanimous in the House and 97-3 in the Senate—and signed by President Bill Clinton. Many liberals at that time supported the law because they felt that the Supreme Court was not solicitous enough of religious practice in its application of the Free Exercise clause of the First Amendment.)

In Burwell, the Court suggested a number of less restrictive ways the government could have ensured cost free access to birth control, but it didn’t definitively decide what the least restrictive way was. Veering into economics for a moment, the idea of cost-free access is an accounting illusion. Employees get health care for the same reason they get a salary: Their employer values their work—up to a certain point—and wants to retain their services. But the price the employer is willing to pay for labor doesn’t vary by the composition of employees’ compensation packages. If government mandates better health insurance, then employees will pay for that in the form of lower salary.

How compelling can the government interest be when the means it has chosen don’t even accomplish the ends it thinks it is accomplishing? If the federal government hadn’t first encouraged (through the tax code) and then mandated (via ObamaCare) employer-provided health insurance, then employees would have more salary that they could spend on whatever they want, including whatever health insurance coverage they desire.

So if the critics of Hobby Lobby want to get their bosses out of their health care, they should really be in favor of getting the government out of their health care. But that can be a hard point to see for those who believe that all businesses are Scrooges who want to take away the Christmas presents. And that is just the point. Megan McArdle perfectly lampoons the mania of the week:

What if my employer says it has a sincere religious belief in human sacrifice – can he kill me?

Yes. If your employer has a deeply held religious belief in human sacrifice, they can strap you in a cage, reach into your chest with their bare hands to pull out your still-beating heart, then drop the cage into a fiery pit. It’s a tough break, but from time to time, the Tree of Liberty must be watered with the blood of patriots. Sorry about that. [Bloomberg View, July 2]

H.L. Mencken, meanwhile, remains spot on:

Civilization, in fact, grows more and more maudlin and hysterical; especially under democracy it tends to degenerate into a mere combat of crazes; the whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, most of them imaginary. [In Defense of Women by H.L. Mencken (1918)]

Posted on 07/04/14 12:34 AM by Alex Adrianson

Private For Profit Companies Have Religious Rights, Too

On Monday, the Supreme Court ruled 5 to 4 that the government cannot force closely held private businesses to provide insurance coverage of contraception services against the companies’ sincerely held religious objections. The ruling, in Burwell v. Hobby Lobby, allows three retailers (Hobby Lobby, Connestoga Wood Specialties, and Mardel Christian Book Stores) to decline to cover the contraception services that the Department of Health and Human Services had included in its list of essential health benefits that must be covered by private employers. HHS had adopted those rules following the passage of ObamaCare. The retailers objected to four of the 20 services on the list, including the intrauterine device, because they believe those procedures or drugs can results in an abortion.

The Court agreed with the retailers that applying the contraception mandate violates their rights under the Religious Freedom Restoration Act, a 1993 law that says government may not impose substantial burdens on the practice of religion unless the burden is the least restrictive means of serving a compelling government interest. Justice Samuel Alito, writing for the Court, explained that the mandate is not the least restrictive means of ensuring women have access to cost-free birth control, pointing to the accommodation that HHS has already created for religious nonprofit corporations that had religious objections to the mandate. Alito wrote:

HHS has provided no reason why the same system cannot be made available when the owners of for-profit corporations have similar religious objections. We therefore conclude that this system constitutes an alternative that achieves all of the Government’s aims while providing greater respect for religious liberty. […]

The effect of the HHS-created accommodation on the women employed by Hobby Lobby and the other companies involved in these cases would be precisely zero.

A key argument made by the government was that the RFRA does not protect for-profit corporations because they do not exercise religion. Alito explained why that is wrong:

A corporation is simply a form of organization used by human beings to achieve desired ends. An estab­lished body of law specifies the rights and obligations of the people (including shareholders, officers, and employ­ees) who are associated with a corporation in one way or another. When rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of these people. For example, extending Fourth Amendment protection to corporations protects the privacy interests of employees and others associated with the company. Protecting corporations from government sei­zure of their property without just compensation protects all those who have a stake in the corporations’ financial well-being. And protecting the free-exercise rights of corporations like Hobby Lobby, Conestoga, and Mardel protects the religious liberty of the humans who own and control those companies.

The Court’s decision does not resolve the hundreds of other cases that have been filed against the contraception mandate, but it does mean that private corporations may assert a claim under the RFRA. It also does not resolve the question of whether the government’s accommodation for nonprofits (which has been challenged by some religious non-profits) is the least restrictive way of providing cost-free access to birth control. Those cases will now work their way through the courts. Following the Hobby Lobby decision, a number of lower courts and the Supreme Court itself issued temporary injunctions against the mandate. [See commentary by Sarah Torre and Elizabeth Slattery, Daily Signal, July 1]

Posted on 07/04/14 12:33 AM by Alex Adrianson

What Sustains Our Independence?

Thoughts from Calvin Coolidge:

Under a system of popular government there will always be those who will seek for political preferment by clamoring for reform. While there is very little of this which is not sincere, there is a large portion that is not well informed. In my opinion very little of just criticism can attach to the theories and principles of our institutions. There is far more danger of harm than there is hope of good in any radical changes. We do need a better understanding and comprehension of them and a better knowledge of the foundations of government in general. Our forefathers came to certain conclusions and decided upon certain courses of action which have been a great blessing to the world. Before we can understand their conclusions we must go back and review the course which they followed. We must think the thoughts which they thought. Their intellectual life centered around the meetinghouse. They were intent upon religious worship. While there were always among them men of deep learning, and later those who had comparatively large possessions, the mind of the people was not so much engrossed in how much they knew, or how much they had, as in how they were going to live. While scantily provided with other literature, there was a wide acquaintance with the Scriptures. Over a period as great as that which measures the existence of our independence they were subject to this discipline not only in their religious life and educational training, but also in their political thought. They were a people who came under the influence of a great spiritual development and acquired a great moral power.

No other theory is adequate to explain or comprehend the Declaration of Independence. It is the product of the spiritual insight of the people. We live in an age of science and of abounding accumulation of material things. These did not create our Declaration. Our Declaration created them. The things of the spirit come first. Unless we cling to that, all our material prosperity, overwhelming though it may appear, will turn to a barren scepter in our grasp. If we are to maintain the great heritage which has been bequeathed to us, we must be like-minded as the fathers who created it. We must not sink into a pagan materialism. We must cultivate the reverence which they had for the things that are holy. We must follow the spiritual and moral leadership which they showed. We must keep replenished, that they may glow with a more compelling flame, the altar fires before which they worshiped. [Address by President Calvin Coolidge at the Celebration of the 150th Anniversary of the Declaration of Independence, Philadelphia, July 5, 1926]

Posted on 07/03/14 09:31 PM by Alex Adrianson

How to Get More Health Care to More People without New Entitlements

If the government really wanted to give people greater access to health care, it would get out of the way:

Posted on 07/03/14 10:59 AM by Alex Adrianson

The Campus Speech Police Have Been Put on Notice

Citrus College in California sets aside 1.37 percent of its campus as a “Free Speech Area,” in which students can say whatever they want—as long as the college doesn’t deem the speech to be “offensive” or “inappropriate.” Iowa State won’t let students wear T-shirts with the words “NORML ISU Supports Legalizing Marijuana.” Chicago State adopted a cyberbullying policy in an attempt to shut down a professor’s blog about corruption in the school’s administration. And at Ohio University, wearing a T-shirt with the words “We get you off for free”—a marketing slogan for a student group that defends fellow students accused of campus offenses—is forbidden.

Those four colleges got sued today by the Foundation for Individual Rights in Education. The simultaneous suits, says the group, are just the first round in a new campaign aimed at ending unconstitutional speech codes at colleges across the country. According to FIRE President Greg Lukianoff, “25 years after the first of the modern generation of speech codes was defeated in court, 58% of public campuses still hold onto shockingly illiberal codes.” The group says its “Stand Up for Free Speech Litigation Project” will sue continuously until there are no more unconstitutional speech codes at American colleges: “Lawsuits will be filed against public colleges maintaining unconstitutional speech codes in each federal circuit. After each victory by ruling or settlement, FIRE will target another school in the same circuit—sending a message that unless public colleges obey the law, they will be sued.” [Foundation for Individual Rights in Education, July 1]

Posted on 07/01/14 03:22 PM by Alex Adrianson

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