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InsiderOnline Blog: January 2008

A Revolution of Mobility on the Way to India

Tata Motors’ Nano, unveiled to the Indian car market earlier this month, is a measure of how far we have come since the days of the model T, says John Baden:

Sixteen million Ts were produced during its 20-year lifespan from 1908 through 1927. It initially sold for $850, about $15,000 in today’s dollars. By 1915, due to the advantages of mass production, the price dropped to $440. It had a 2.9-liter engine, ran on either gasoline or ethanol, developed 20 HP, and got 20 MPG.

By giving affordable independence and mobility to the workingman, it changed the world. Now, 100 years later, Tata Motors of India announced the Nano, a car far superior to the T, for a mere $2,500. In constant dollars, this is only one sixth the price that seduced Model T buyers. The Nano gets 50 MPG, two and a half times that of the T—and gas is cheaper today.

Sure, the Nano isn’t a BMW, but that’s not the point. Capitalism responds to what consumers want—and can afford. In doing so, it expands opportunities for everybody—especially the poor.

Posted on 01/30/08 05:52 PM by Alex Adrianson

Turkey Has No Tolerance for Those Who Think It Is Backward

An academic pushing for a more liberalized Turkey has discovered that Turkey isn’t yet ready for more liberalization—though its leaders are pushing hard to join the European Union. During a scholarly talk in November of 2006, Atilla Yayla stated that Turkey had been politically backward during the early years of its republic. Turkish authorities responded by prosecuting Yayla for violating a law against insulting Turkey’s founder, Kemal Ataturk. On Monday, a Turkish court sentenced Yayla to a 15-month suspended jail term. That could be considered mildly good news, since the prosecutor had asked for a five-year jail term.

Yayla, by the way, is the co-founder of the Association for Liberal Thinking, an organization that promotes classical liberal values like free speech, private property, limited government, the rule of law, free markets, and civil society. If Turkish authorities want Europeans to think that Turkey isn’t backward, then they should read more of Yayla’s work and stop threatening to put him and other intellectuals in jail.

See Academic Sentenced Over Ataturk by Sarah Rainsford, BBC News, January 28, 2008.

Posted on 01/30/08 05:17 PM by Alex Adrianson

Intercollegiate Studies Institute Launches New Web Journal

The Intercollegiate Studies Institute has just launched (softly) a new Web journal called First Principles. It will have new content every day for readers who care about the intellectual foundations of a free society. ISI plans a more heavily promoted launch down the road. Eventually, ISI’s archive of over 16,000 articles from Intercollegiate Review, Modern Age, and Political Science Reviewer will be available through First Principles. In the meantime, ISI is looking for writers interested in contributing articles or reviews.

Posted on 01/30/08 02:56 PM by Alex Adrianson

Polar Bears an Environmental Pawn

The Department of Interior is considering listing the polar bear as threatened under the Endangered Species Act. (Threatened is a lesser degree of endangered.) The purported reason is that prospective global warming supposedly will reduce the amount of summer ice needed by the bears. Judging from the data, however, polar bears may want a little more global warming. In 1965-1970, global polar bear populations stood at somewhere between 8,000 and 10,000. Since then, polar bears have thrived under what environmental activists characterize as a potentially catastrophic warming trend. Today there are approximately 20,000 to 25,000 polar bears in the world. No matter. Environmentalists have asked the Department of Interior to list the polar bears as threatened.

As Ben Lieberman notes, this would be the first time a species has been listed under the Endangered Species Act because of global warming. And the impact of such a listing would be huge. The exploitation of oil and natural gas resources in Alaska—habitat for many polar bears—would be significantly hampered. Even more troubling, however, is that the listing would create grounds for regulating energy consumption throughout the country. If regulators consider global warming to be the source of the threat to the polar bear, then they might decide that any carbon-dioxide emitting activities should be regulated. The Endangered Species Act would then become a backdoor way of implementing a climate change policy of limits to energy consumption.

See Don’t List the Polar Bear Under the Endangered Species Act by Ben Lieberman, The Heritage Foundation, January 25, 2008, and House Hearing Should Look at the Facts on Polar Bears, Competitive Enterprise Institute, January 17, 2008.

Posted on 01/29/08 05:56 PM by Alex Adrianson

Health Care Eats Your Raise

Job-based health insurance and pensions are making the middle class benefit-rich and wage-poor. Grace-Marie Turner:

The average American worker's wages rose by $2,975 from 2000 to 2005 (the most recent period for which data are available). And that's after inflation. …

Of that $2,975, the average worker received just $879 — 29% — of their pay increase in actual cash wages over the five-year period, according to Gary Burtless of the Brookings Institute.

Where did the rest of it go, if not into workers' pockets? Most of it was snapped up in paycheck deductions before it ever reached their bank accounts or wallets.

Most of the money went to higher payments for job-based health insurance and pension contributions, both of which are deducted directly from workers' paychecks. More than one-third of the average wage increase went to pay for higher health insurance premiums and a fourth of it went to retirement contributions.

Turner also notes: “What saved workers from actually going in the hole in the first half of this decade were the Bush tax cuts enacted in 2001 and 2003.”

Posted on 01/29/08 03:45 PM by Alex Adrianson

Torts: Loser-Pays Rule Would Prevent Strong Cases Getting Sold Out

In offering to settle Vioxx suits, Merck is cleverly taking advantage of the bad incentives that the U.S. tort system gives to lawyers. Marie Gryphon explains:

The lawyers, for their part, have never intended to take most of their cases to trial. Anticipating a settlement, they gorged their portfolios with claims so weak that they would cost much more to litigate individually than they would yield in fees. To get a positive return on these nuisance suits, lawyers are now flocking to an agreement that sells out the interests of those clients who actually have viable claims.

… Lawyers are more interested in settlement than their clients because trials cost clients very little additional money—direct costs are fronted by attorneys and customarily are not collected from unsuccessful clients—while they cost lawyers a great deal of time. Though lawyers have an ethical obligation to resist the incentive to settle cases against their clients’ interests, lawyers who file money-losing nuisance suits must settle them to remain in business. Mass-tort defendants like Merck are learning how to take advantage of this need by offering to settle the nuisance suits only if the trial lawyers also deliver up their strongest cases at bargain rates. The plaintiffs with strong cases lose out, while the trial lawyers and the dubiously injured benefit.

The solution, says Gryphon, is to have a loser-pays rule, which would eliminate lawyer’s incentive to file weak suits, “and could head off a burgeoning ethical crisis among mass-tort lawyers who are selling out clients with strong cases in order to settle suits that they should never have filed in the first place.”

Posted on 01/29/08 02:16 PM by Alex Adrianson

Congress and the Collection of Foreign Intelligence

The Protect America Act, which updated the rules under which U.S. intelligence agencies are able to intercept the communications of suspected terrorists overseas, expires on February 1. Without an extension, U.S. intelligence agencies would have to abide by the rules of the Foreign Intelligence Surveillance Act (FISA), even though current technology has made those rules obsolete. Robert Alt, Todd F. Gaziano, and Brian Walsh of The Heritage Foundation explain:

Because significant advances in technology that change how calls and packets of data are routed have occurred since the passage of FISA in 1978, and because most of the world’s largest telecommunications and Internet service providers are located in the United States, this would have required a FISA warrant for surveillance of potentially every person located overseas. No one could know in advance whether any communication by a person located outside the United States might end up being routed through the United States. DNI McConnell disclosed that thousands of individuals overseas are being monitored for terrorist activities. Obtaining approval for each intercept would be nearly impossible.

Each FISA application requires approximately 200 person-hours of government attorneys’ and other intelligence officials’ time for each telephone number intercepted. Only about 100 persons are being monitored in the United States, but this alone requires the equivalent of full-time service of ten government attorneys or other intelligence officials just to prepare the FISA applications. … Thousands of persons outside of the United States are being monitored for terrorism-related activities. For every thousand, 100 government officials would have to spend a year working fulltime to prepare all of the FISA applications. As former National Security Administration General Counsel Robert L. Dietz noted in congressional testimony concerning revising FISA: “My concern is analyst time. And the issue that most concerns us is counterterrorism experts and analysts do not grow on trees. And every time I’ve got five or 10 or 15 or 20 counterterrorism experts working FISA factual issues, that’s time when they’re not trying to stop the enemies of the United States.” … This is not the formula for a nimble and effective international intelligence regime.

Roger Pilon of the Cato Institute also thinks Congress should extend the Protect America Act. Pilon notes, however, that the Senate bill still gives courts too much oversight:

The Senate bill would require showing probable cause before targeting even U.S. persons abroad, dramatically increasing the role of the FISA court. As Judge Richard Posner wrote on this page two years ago, FISA may be valuable for monitoring communications of known terrorists, “but it is hopeless as a framework for detecting terrorists. It requires that surveillance be conducted pursuant to warrants based on probable cause to believe that the target of surveillance is a terrorist, when the desperate need is to find out who is a terrorist.”

Pilon says the underlying FISA law is the real problem:

From the beginning, presidents have exercised their Article II executive power to gather foreign intelligence — in war and peace alike, without congressional or judicial intrusion. As our principal agent in foreign affairs, the president is constitutionally bound to protect the nation. For that, intelligence is essential.

The remedy for executive incompetence or recklessness in foreign affairs is political — not legislative, much less legal. Congress, to say nothing of the courts, can no more manage such affairs than it can the economy.

Posted on 01/29/08 11:47 AM by Alex Adrianson

This Week in Washington

Posted on 01/28/08 05:18 PM by Alex Adrianson

Culture of Corruption Limps On

President Bush announced some positive but timid steps toward reining in earmarks today. Late last year, when Congress finally approved the spending bill to fund the federal government for fiscal year 2008, Congress identified over 9,000 items it wanted funded outside of any normal merit-based procedures for allocating funding. Many of those earmarks were identified only in report language, not the actual text of the bill itself. And some earmarks weren’t even added until the conference committee, which is supposed to iron-out differences between the House and the Senate, not add new stuff. Counting earmarks in the previously passed defense appropriations bill, Congress approved approximately 11,700 earmarks worth $16.9 billion for 2008.

In response, fiscal conservatives had called on President Bush to issue an executive order instructing agencies to ignore the earmarks not included in the text of the appropriations bills. President Bush has decided to issue an executive order along those lines—but it will apply only to future appropriations bills, not the omnibus or defense appropriations bills already passed for 2008. Bush also announced that he will veto any future appropriations bills that fail to cut earmarks in half. These are positive steps, though not as big as could have been taken.  

One good thing about the executive order is that it is unlikely a future President would repeal it. Pork may be the secret to electoral success for some members of Congress, but Presidents have institutional incentives to want the widest possible discretion in allocating appropriated funds. Presidents are also elected by the country as a whole, not merely by the voters of a particular state or congressional district, and for that reason it is hard to imagine that a President would gain politically by repealing the executive order and explicitly siding with Congress on the issue of pork. So even though the 2008 appropriations won’t fall under the scope of the executive order, in the long run, the President’s action is probably a very good thing.

Posted on 01/28/08 03:55 PM by Alex Adrianson

Krugman’s Priorities

In case you had stopped reading Paul Krugman, Dan Klein and Harika Barlett can fill you in. They’ve just written a critique of Krugman’s New York Times columns for the past decade—and they read all 654 of them (ouch!). Their conclusion: Krugman cares less about poor people than about defending the interventionist welfare state built by the Democratic Party from FDR to LBJ. Klein and Barlett find that while Krugman will defend any and all government interventions that ostensibly help the poor, he is remarkably silent on numerous issues where government intervention has demonstrably hurt the poor. Klein and Barlett say such treatment could be the result of ignorance of the issues by Krugman, but is more likely a case of Krugman deliberately avoiding issues that don’t help him make the case for collectivist solutions. Why does he do this? Klein and Barlett theorize that Krugman believes building and defending a social-democratic ethos that emphasizes collective action is necessary to helping the poor in the long run.

If true, these biases are certainly not unique to Krugman. For those of us in the business of changing minds, it’s good to know where the other side is coming from.

Posted on 01/25/08 12:54 PM by Alex Adrianson

Cell Phone Users Slammed with Taxes

Consumers aren’t the only ones benefiting from cell phones; state and local governments are cashing in, too. In 2007, for the first time, Americans spent more on cell phones than they did on landlines. But, according to the Tax Foundation, “Cell phones are taxed at a much higher level than other consumer items, even as much as or more than alcohol or cigarettes.”

These state and local levies averaged 9.04 percent in 2005, according to the Council on State Taxation, with 20 states charging a tax of 10 percent or more. Taking into account the infamous federal telephone excise tax (dating to the Spanish-American War and partly repealed in 2006), some cell phone subscribers pay more than 20 percent in cell phone taxes.

Tax Foundation also notes:

Because each state and many localities can impose cell phone taxes, and because they can be imposed as a percentage or as a flat rate, there are numerous taxes which vary widely. Researchers have found it difficult to create a database of cell phone taxes, and cell phone companies have encountered similar problems in calculating the taxes. This can be a serious problem for cell phone businesses, because they collect the taxes from subscribers and can be held legally accountable for any mistakes—both over-collection and under-collection.

See States Target Cell Phones for a Stealth, Burdensome Tax by Joseph Henchman, Tax Foundation, January 18, 2008

Posted on 01/25/08 09:31 AM by Alex Adrianson

Learn from the French?

Giving people things is a tried and true method of becoming popular. That’s why Robert Byrd gave candy to his future wife and, as a senator from West Virginia, a lot of roads to his constituents. (Both the candy and the roads, by the way, were paid for with somebody else’s money!) Byrd got the wife, and he got the voters.

Can a politician succeed by promising that government will do less? That’s the course charted by French Prime Minister Francois Fillon. He told Financial Times that he wants to freeze public spending in France for the next five years. The freeze, he said, will be part of an economic reform law that aims to reduce both the national debt and the size of government relative to the economy. Fillon told Financial Times: “One thing is certain: we will not raise VAT [in return for a cut in social charges]. The priority for me is reducing public expenditure.”

The good news is that Fillon’s message of fiscal responsibility seems to be resonating with the French public. Financial Times reports that recent polls show that the Prime Minister is now more popular that President Nicolas Sarkozy

Fillon does have one advantage that fiscal reformers elsewhere don’t. He can point out that France’s government already swallows 53.5 percent of the French economy—the highest percentage of any country in the European Union. Is that how big government has to get before voters figure out that they have too much of it?

Posted on 01/24/08 02:31 PM by Alex Adrianson

The Coming Week

Wednesday – Thursday: Assess whether the American taxpayers are getting their money’s worth in homeland security. The Mercatus Center hosts a two-day seminar examining whether the spending priorities in the U.S. homeland defense budget reflect the real threats to the country’s safety.

Thursday: Learn what Afghan women can to help their country become peaceful and prosperous. The Independent Women’s Forum hosts a delegation of senior women leaders from Afghanistan.  

Thursday: Take a peak inside the mind of dictator. At the American Enterprise Institute, Leon Aron, Jonathan Brent, and Ronald Radosh discuss the recently opened archive of Stalin’s personal writings and what they mean for Russia today.

Friday: Find out what it will take for Zimbabwe to be free and prosperous again. The Heritage Foundation hosts David Coltart, Shadow Justice Minister and Member of Parliament for Bulawayo South, Republic of Zimbabwe.

Friday: Learn why school reform is failing and what needs to be done about it. The Independence Institute hosts author Jerry Wartgow.

Posted on 01/18/08 01:55 PM by Alex Adrianson

Heritage on Video

Heritage in Focus: Everywhere in the world, economic freedom is the key to prosperity.

At Heritage: What do the recent Taiwanese elections mean? … State drivers licenses need to become a more secure credential.

Posted on 01/18/08 01:53 PM by Alex Adrianson

New Issue of The Insider

The new issue of The Insider is out, featuring an article by William Voegeli on the topic of what ever happened to the idea of making government smaller?

Posted on 01/18/08 01:51 PM by Alex Adrianson

Michigan: Most Desirable State to Leave

While Michigan’s political leaders continue to express their preference for higher taxes, Michigan’s residents continue to express their preference for someplace other than Michigan. Unemployment in Michigan currently stands at 7.4 percent—worst in the nation—and residents are voting with their feet. According to that latest data from United Van Lines, 67.8 percent of Michigan clients are headed out of the state—a figure that is also tops in the nation. And last year, the state was tied for highest outbound proportion, too. Just imagine how bad the unemployment rate would be if it weren’t for all the people who have already left. Perhaps all the Michigan lawmakers who recently voted for a $1.4 billion tax hike should take a trip to the border, too. There they’ll see signs on the Indiana side reading: “Come on IN for Lower Taxes, Business and Housing Costs.”

See Michael D. LaFaive and Michael J. Hicks, Michigan’s Diaspora: The Revealed Preference for Leaving, Mackinac Center for Public Policy, December 13, 2007 (Updated January 4, 2008).

Posted on 01/18/08 11:42 AM by Alex Adrianson

Be Like Publius!

If you are a highly qualified college senior, a recent college graduate, or a graduate student interested in a career in politics, scholarship, or journalism, you should consider applying for the Claremont Institute’s Publius Fellowship program, for which Claremont recently announced it was accepting applications:

Every summer since 1979, the Claremont Institute has brought together a select group of young conservatives for the Publius Fellowship. These Publius Fellows meet with the Institute’s Senior Fellows and other distinguished visiting scholars to study American politics and political thought. In intensive daily seminars and relaxed evening symposia, fellows discuss great American readings—from the Founding, the Civil War, the Progressive Era, and the enduring disputes today between liberalism and conservatism. Fellows also work with the editors and writers of the Claremont Review of Books to hone the craft of political writing. …

The Publius Fellowship takes its name from The Federalist Papers. Written in 1787-88 as a series of newspaper essays, The Federalist Papers remain the preeminent work of American political journalism. Alexander Hamilton, James Madison, and John Jay published the papers under the pen name “Publius,” a founder of the Roman republic. The Federalist addressed the crucial political question of their day, the ratification of the Constitution and the founding of the American republic. Publius drew on both political philosophy and the experience of statesmen to commend the Constitution as the basis of free and just government.

The program runs June 25 to July 9, 2008.  Applications are due March 14.

Resources: Application Materials, 2007 Publius Fellows

Posted on 01/18/08 10:23 AM by Alex Adrianson

Consumers Beware! has found a suspicious new product on the market:  

In Europe, policy packages are like patent remedies: if they promise to cure one or two ills, they might be worth a try; if a dozen, suspect quackery. On January 23rd the European Commission is to unveil a comprehensive energy policy that promises to curb climate change, increase energy security, shield economies from volatile fuel prices and foster new industries in which Europe will lead the world. 

Hat tip: Friday Facts, January 18, Georgia Public Policy Foundation

Posted on 01/18/08 09:54 AM by Alex Adrianson

That’s the Kind of Concurring Opinion We Like

“But, as I recall my esteemed former colleague, Thurgood Marshall, remarking on numerous occasions, ‘The Constitution does not prohibit legislatures from enacting stupid laws.’”

—Justice John Paul Stevens in a concurring opinion upholding New York State’s system for nominating candidates for trial court judges—a system that critics contended gave political parties too much power to control who is nominated.

Source: Robert Barnes, Court Lets 'Party Boss' Law Stand, Reluctantly, Washington Post, January 17, 2008

Posted on 01/18/08 09:29 AM by Alex Adrianson

More Reasons Not to Have a Stimulus

Former Rep. Bill Thomas and Alex Brill, writing in today’s Wall Street Journal, offer five reasons why a fiscal stimulus is not a good idea:

  1. “[T]here is no way that a tax cut can be enacted in the first quarter of 2008. Thus, fiscal policy action would come too late if one accepts the gloomiest economic forecast.”
  2. “[T]he economic evidence from the 2001 experience suggests [a rebate] is an ineffective tool. Professors Matthew Shapiro and Joel Slemrod from the University of Michigan found that most rebates were saved, not spent.”
  3. “[T]he 2003 tax cut was enacted in an environment when monetary policy was possibly near the end of its rope. … Not so today.”
  4. “[A]lthough the political calendar suggests that now is the time to launch the stimulus debate, the economic data are far from compelling. While some on Wall Street have recently issued forecasts for recession, the data to date only indicate elevated risks.”
  5. “The amplified rhetoric of economic doom from leaders and hopeful leaders in Washington may become a self-fulfilling prophecy as consumers curtail their spending in response to the predictions of recession by their favorite candidates.”

Posted on 01/18/08 09:08 AM by Alex Adrianson

Police Protect You and Your Property—Unless They Don’t

Does a search warrant give government the right to destroy private property with impunity? In Washington State, they have an answer to that question: The state constitution says that when the property of an innocent party is damaged in the course of police work, the government must reimburse the property owner.

That must be reassuring to property owners. But wait—maybe not.

Today, the Washington Supreme Court hears a case in which a local government has tried to skate on its constitutional obligations. Plaintiff Leo Brutsche, represented by the Washington Chapter of the Institute for Justice, wants the city of Kent to reimburse him for damages caused during a 2003 raid on his property. According to the Institute for Justice:

Mr. Brutsche offered to let the officers into his property using his keys, but the officers decided to use a battering ram to enter various buildings. The battering ram caused extensive damage to Mr. Brutsche’s doors and windows. Mr. Brutsche was never charged with a crime and the police did not seize any evidence from his property. 

Well hey, who doesn’t think battering rams are more fun than keys? But as IJ points out, nobody is even trying to say that police can’t have their fun with battering rams. What IJ is asking the state’s high court to do is simply affirm that innocent property owners must be compensated for damage caused through police work.

So far, lower courts have ruled against plaintiff Brutsche, which seems like another instance in which courts have been instinctively overprotective of the prerogatives of law enforcement. But if the plain language of the state constitution says A, then the courts should say A, too.

Posted on 01/17/08 06:04 PM by Alex Adrianson

Stimulus Schmimulus

Steve Chapman notes some reasons to be skeptical of a stimulus plan:

In 2001, the Treasury mailed rebates of $300 to $600 to taxpaying households, something the Bush administration later credited for invigorating the economy. In reality, later studies found, people generally declined to go out and spend, preferring to save the money or pay down debt. The booster rocket never left the launch pad.

Back in 1993, by contrast, President Clinton said a fiscal stimulus was essential to revive economic growth. But Congress refused, and the productive sector somehow managed to grope its way, unstimulated, into the longest peacetime expansion in history.

In their more sober moments, economists offer numerous reasons to treat fiscal stimulus as a wasteful charade. William Gale and Samara Potter of the center-left Brookings Institution noted in a 2002 study that tax changes of the sort being contemplated today have “a weak record in stimulating short-term economic activity.”

Chapman also notes, however, that one thing is for certain: A stimulus plan will cost taxpayers.

Posted on 01/17/08 04:31 PM by Alex Adrianson

Sovereign Wealth Funds and the U.S. Budget

Should the United States be concerned about foreign governments buying up America’s assets, via sovereign wealth funds? The concern is certainly overblown, but to the extent that there is a real issue, Congress should regard it as a cue to get America’s fiscal house in order, not to further regulate an already overregulated financial sector. Excessive entitlement programs, the threat to the U.S. credit rating, troubles in the housing sector, the rise of sovereign wealth funds—all connected, says Harold Furtchgott-Roth:

Our short-term economic difficulties are the result of bad private risk management of financial portfolios; our longer-term predicaments are bad risk management of federal entitlement programs. Unduly risky portfolios of private investments have been funded; enormous unfunded liabilities are on the federal books. Additional spending will do nothing to solve either problem.

A sound federal budget would not have enabled Citigroup to escape its poor risk management practices, but it might have made Citigroup’s recovery easier. Citigroup has looked for financing from sovereign wealth funds controlled by the governments of Saudi Arabia, Kuwait, China, Abu Dhabi, and other countries. They do not have the luxury of a legislature capable of spawning dozens of presidential candidates but not a single law to repair unsustainable programs. Under better national financial circumstances, Citigroup could have looked domestically as well as abroad for new financing.

Sadly, our federal government also looks to the same foreign investors and sovereign wealth funds to help finance moderate budget deficits today and daunting deficits tomorrow. The few billion needed to resuscitate the wilted Citigroup will pale when compared to the tens of trillions our federal government will need to borrow in coming decades.

Posted on 01/17/08 12:19 PM by Alex Adrianson

Government Health Care Driving Emergency Room Overcrowding

Patients in America’s emergency rooms wait longer today than they did in 1997 for treatment, according to a new study by researchers at the Harvard Medical School. Washington Post reports:

Half of all emergency room patients waited 30 minutes or more before being examined by a doctor in 2004, a 36 percent increase from a median wait time of 22 minutes in 1997, according to the study, published today in the journal Health Affairs.

Even those experiencing a heart attack are not assured speedy treatment, with half waiting 20 minutes or more to be examined in 2004, up from eight minutes in 1997, the study found. The same was true for those with other serious health problems: By 2004, patients whose conditions warranted treatment within 15 minutes were waiting 14 minutes or more to see a doctor, up from 10 minutes in 1997, the study found.

Government financing of health care, according to John O’Shea, is significantly complicit in the overcrowding of emergency rooms. In a paper published last month by The Heritage Foundation, O’Shea says that rising costs of providing care and lower reimbursements by managed care, Medicare, and Medicaid have induced a “net loss of 703 hospitals, 198,000 hospital beds, and 425 EDs” between 1994 and 2004.

O’Shea also notes that very low reimbursement from Medicaid has made primary-care doctors less willing to see Medicaid patients, forcing those patients to rely on emergency rooms for primary care. At the same time, the high costs to doctors of medical liability for emergency care combined with the low reimbursement rates have made doctors less willing to provide on-call services to emergency rooms.

Many factors are driving the crisis, but one solution seems clear enough. Patients with private health insurance are less likely to use emergency rooms as a source of primary care. If government policy focused on expanding private coverage instead of public programs, emergency rooms would be able to focus more on delivering emergency care instead of being the provider of last resort for the uninsured.

Posted on 01/15/08 05:23 PM by Alex Adrianson

Economic Freedom Still the Key to Growth

For the 14th consecutive year, Hong Kong has the freest economy in the world, according to latest edition of The Index of Economic Freedom, released this morning by The Heritage Foundation and the Wall Street Journal. This year’s Index also confirms an important finding from previous Indexes: Prosperity happens when governments get out of the way and let entrepreneurs create wealth. The Index shows that the freest 20 percent of the world’s economies have twice the per capita income of those in the second quintile and five times that of the least-free 20 percent.

Overall economic freedom in the world remains at about the same level as last year. Last year’s average score was the second-highest since the Index was first published in 1995. Mary Anastasia O’Grady writes:

This is somewhat of an achievement considering the rising protectionist and anti-immigration sentiment in the U.S., the uncertainty created by spiking global energy prices, Al Gore's highly effective fear mongering about global warming, and the continuing threat of the Islamic jihad.

For more details, see Mary Anastasia O’Grady’s article in this morning’s Wall Street Journal, or check the Index of Economic Freedom Web site at

Posted on 01/15/08 10:31 AM by Alex Adrianson

When the Environment Attacks …

Twenty-two bald eagles died when they dove into an uncovered truck full of fish guts in Anchorage, Alaska. The truck was owned by Ocean Beauty Seafoods. The Associated Press reports that workers from the seafood plant and the Fish and Wildlife Service washed 30 or so surviving birds in dishwashing soap and let the eagles dry overnight in a warehouse. Most of the surviving eagles are expected to recover.

The Bald Eagle, of course, is a protected species, so the Fish and Wildlife Service is investigating whether the seafood plant is in anyway culpable for the attack—or rather for being attacked.

We have lots of laws protecting nature, but nature isn’t always benign. Sometimes nature is the aggressor. If the bald eagle mobbing had endangered human beings, what would the law have allowed them to do to protect themselves and their property?

FWS spokesmen have indicated they think there is no violation of the law, since the seafood company didn’t intend to hurt the birds. Still, nature attacked and the truck owners have to satisfy bureaucrats that the victims aren’t to blame.

Posted on 01/14/08 03:43 PM by Alex Adrianson

Murtha’s Machine

The New York Times summarizes how the culture of corruption works—especially how it works for Rep. John Murtha (D-Pa.) chairman of the House Committee on Appropriations subcommittee on Defense:

Mr. Murtha led all House members this year, securing $162 million in district favors, according to the watchdog group Taxpayers for Common Sense. …

In 1991, Mr. Murtha used a $5 million earmark to create the National Defense Center for Environmental Excellence in Johnstown to develop anti-pollution technology for the military. Since then, it has garnered more than $670 million in contracts and earmarks. Meanwhile it is managed by another contractor Mr. Murtha helped create, Concurrent Technologies, a research operation that somehow was allowed to be set up as a tax-exempt charity, according to The Washington Post. Thanks to Mr. Murtha, Concurrent has boomed; the annual salary for its top three executives averages $462,000.

… Every one of the 26 beneficiaries of Mr. Murtha’s earmarks in last year’s defense budget made contributions to his campaign kitty, a total of $413,250, according to the newspaper Roll Call. The Pentagon, seeking its own goodies before Mr. Murtha’s committee, is noticeably hesitant to challenge his projects. And we’re not hearing a lot of objections from his colleagues — not after members have ladled out a fresh $15 billion for their own special interests, just in time for the coming elections.

Posted on 01/14/08 03:03 PM by Alex Adrianson

Bush Justice Sides with D.C. in Gun Case

The Bush Department of Justice has submitted a brief to the Supreme Court that will likely not help the challenge to the District of Columbia’s gun laws that the Supreme Court will hear later this year. John Lott describes the brief:

The Department of Justice argument can be boiled down pretty easily. Its lawyers claim that since the government bans machine guns, it should also be able to ban handguns. After all, they reason, people can still own rifles and shotguns for protection, even if they have to be stored locked up. The Justice Department even seems to accept that trigger locks are not really that much of a burden, and that the locks “can properly be interpreted” as not interfering with using guns for self-protection. Yet, even if gun locks do interfere with self-defense, DOJ believes the regulations should be allowed, as long as the District of Columbia government thinks it has a good reason.

What an odd position. The DOJ brief, according to Lott, acknowledges that the Second Amendment creates an individual right to keep and bear arms. What good is an individual right if it can be ignored whenever government declares it has a good reason to do so? All depredations against liberty come with reasons given by governments. Does the DOJ imagine that governments ever think their reasons are not good? Would the Department of Justice ever take the position that Congress shall make no law abridging the freedom of speech … unless it thinks it has a good reason? If not, then why a different standard for the Second Amendment than for the First?

The DOJ position, as Lott notes, should not be too surprising, given the department’s institutional interest in enforcing federal firearms laws:

Worried about the possibility that a Supreme Court decision supporting the Second Amendment as an individual right could “cast doubt on the constitutionality of existing federal legislation,” the Department of Justice felt it necessary to head off any restrictions on government power right at the beginning.

Posted on 01/14/08 02:36 PM by Alex Adrianson

More Misguided Advice on Guantanamo

Yesterday, Admiral Mike Mullen, chairman of the U.S. Joint Chiefs of Staff, expressed his opinion that the detention facility at Guantanamo Bay should be closed. He said the perception of how prisoners are treated at the facility has been damaging to America’s reputation.

The Heritage Foundation has written extensively about the controversy over Gitmo—specifically how misguided the debate over Gitmo has been. James Carafano sums up the case against closing the Gitmo detention facilities:

Despite the frequent claims of prisoner abuse at Guantanamo Bay, there is little evidence to back up those claims. The Pentagon spends $2.5 million each year on Korans, prayer rugs, and special meals for Muslim prisoners. Moreover, there are on average two lawyers for every detainee at Guantanamo, and detainees have challenged their status before the U.S. Supreme Court. By any measure, the U.S. govern­ment has extended our deadly enemies unprecedented legal rights.

Despite its admirable record in dealing with the challenges posed by unlawful combatants, the U.S government has received unwarranted criticism. Human rights activists, media outlets, and critics of the Administration have derisively characterized the U.S. military detention facility at Guantanamo as the “gulag of our times.” … Specifically, they argue that the detention of enemy combatants at Guantanamo Bay violates international law and that the U.S. is unlawfully denying detainees the right to habeas corpus.

… Most of the detainees at Guantanamo were captured while fighting for the Taliban or al-Qaeda and wore no uniforms or insignia, refused to carry their arms openly, and—perhaps most important—represented no govern­ment and thus no military hierarchy.

Consequently, the detainees are not entitled to Prisoner of War (POW) status or the full protection of the Geneva Conventions, let alone unfettered access to U.S. courts. Summarily granting them these privileges would cripple the integrity of the laws of war.

Moreover, even if the detainees were granted POW status, the Geneva Conventions require that combatants be released from custody only “after the cessation of active hostilities.” …

What is missing from critics’ arguments for closing Guantanamo Bay is a sense of perspective. Any proposal to move detention operations must articulate how these detention operations can be performed more efficiently and effectively than they are being performed now. Arguing that the U.S. should close the facilities merely to placate crit­icisms of its detention policies is insufficient. The governments responsibilities will not change, and it is therefore unlikely that detention operations will be conducted in a significantly different manner in a different location. Merely closing the facilities at Guantanamo Bay is not likely to placate any of America’s critics.

Posted on 01/14/08 11:42 AM by Alex Adrianson

The Coming Week – Monday, January 14, 2008

Monday: Learn how realism guided President George H.W. Bush’s foreign policy, even as he sounded like an idealist. The American Enterprise Institute hosts author Timothy Naftali, director of the Richard Nixon Presidential Library and Museum.

Monday: Discover the Fascist roots of the American Left. The National Center for Policy Analysis hosts Jonah Goldberg, editor-at-large of National Review Online and author of Liberal Fascism: The Secret History of the American Left, From Mussolini to the Politics of Meaning.

Wednesday: Find out how national standards for state drivers licenses can help make the United States more secure. The Heritage Foundation hosts a panel looking at the implementation of REAL ID.

Wednesday: Assess the place of the family in popular culture today. The Claremont Institute hosts Jennifer Marshall, author of Now and Not Yet: Making Sense of Single Life in the Twenty-First Century, and Carol Platt Liebau, author of Prude: How the Sex-Obsessed Culture Damages Girls (and America, Too!). To RSVP, please contact Noreen Burns, at or (703) 248-9413.

Wednesday: Examine privacy in the age of Google. America’s Future Foundation hosts Marc Rotenberg, of the Electronic Privacy Information Center, Cord Blomquist of the Competitive Enterprise Institute, Amber Taylor of O'Melveny & Myers LLP, and Chris Pope of the American Enterprise Institute.

Posted on 01/11/08 02:44 PM by Alex Adrianson

Heritage on Video

Heritage in Focus: The President should instruct agencies to ignore any earmarks not written into law. … The next step in Iraq is to translate security gains into a durable power sharing agreement.

At Heritage: Fascism has its roots in the political Left. … What comes after “the surge” in Iraq?

Posted on 01/11/08 02:43 PM by Alex Adrianson

All Markets Need Skeptical Consumers

The carbon-offset market may face increased scrutiny of the promises it is selling to consumers who want to be carbon neutral. The Federal Trade Commission held a hearing on Tuesday in which it examined whether carbon offsets really reduce carbon emissions as much as their sellers calculate. According to a New York Times story on the hearing, the FTC didn’t accuse anyone of wrongdoing, but rather used the hearing to gather information on how the market works.

A cynic might say that those who purchase carbon offsets tend to be a little more credulous than those who don’t buy carbon offsets. After all, they’ve already bought into the storyline of catastrophic man-made global warming.

Hat tip: Daily Policy Digest

Posted on 01/11/08 02:42 PM by Alex Adrianson

Resources for Taxpayer Activists

The National Taxpayers Union has just started a program of assistance for leaders working to limit excessive taxing and spending at the local level. If you are interested in starting up a new anti-tax group and need resources, fill out NTU’s grant application. Contact Kristina Rassmussen at 703-683-5700 or for more information.

Posted on 01/11/08 02:05 PM by Alex Adrianson

Remembering Goldwater

January 2 was Barry Goldwater’s 99th birthday. The Goldwater Institute has posted a radio interview in which Darcy Olsen assesses the importance of Barry Goldwater’s legacy to the success of conservative ideas. Check it out.

Also, it’s worth noting that a new edition of Goldwater’s The Conscience of a Conservative is being published by The James Madison Library in American Politics. The new edition has been edited by C.C. Goldwater, Barry Goldwater’s granddaughter, and features a foreword by George Will.

Posted on 01/11/08 12:35 PM by Alex Adrianson

Now Everyone Can Own a Car—and That’s a Good Thing!

Motoring is coming to the masses in India. Tomorrow, India’s Tata Motors will unveil its “People’s Car,” which carries a price tag of approximately $2,600. The Wall Street Journal also reports that Nissan, Ford, and other car makers, tempted by a burgeoning worldwide market for a car with a low price point, are considering developing their own super-cheap models.

This is good news. Cars make it easier for people to get around and do things they want to do—like find better jobs, and educational and social opportunities. Expanding access to automobiles will expand opportunity and surely be a boost to economic growth. Last July, the Reason Foundation’s Ted Balaker wrote an excellent paper, Why Mobility Matters to Personal Life, which The Insider excerpted in its Summer issue. Balaker argued that policymakers have paid insufficient attention to the problem of traffic congestion, ignoring the nexus between mobility and opportunity:

The freedom of mobility helps make other freedoms more meaningful. The more mobility we enjoy, the more choices we have. Mobility gives us more of what’s important in life.

Imagine that you are in the center of a circle. Call it your opportunity circle.

The space within the circle represents the amount of ground you can get to in a reasonable amount of time, say, one hour. The dots represent all the possible jobs you can apply for. The bigger your opportunity circle, the more jobs you can get to, and the better chance you have of landing the job that is right for you. If your mobility improves, the circle grows and you have more opportunities. If mobility degrades, the circle shrinks and you have fewer opportunities. And the dots need not represent just job opportunities. If you are an employer the dots could represent potential customers or your available labor pool. The dots could actually represent just about anything, from dining opportunities (area restaurants) to opportunities for love (available singles).

Of course, there are always naysayers. Financial Times reports:

Environmentalists … fear that already clogged roads and polluted cities will soon be overwhelmed by millions of learner drivers, especially as other Indian industrialists now have plans for low-priced cars. …

Climate change expert R.K. Pachauri, chairman of the joint Nobel Prize-winning Intergovernmental Panel on Climate Change, recently said the idea of the [$2,500] car bringing motoring to a genuinely mass market in India was giving him “nightmares”.

Environmentalists warn that with Indian emission norms still lagging several years behind those of the European Union and pollution levels at critical levels in many of the larger cities, the race to produce a super-cheap car is likely to impose massive costs on society that are not adequately reflected in dealers' prices.

According to the Financial Times story, critics also point out that adding more cars to India’s overcrowded roads will make worse an already bad traffic safety problem.

Pollution and unsafe roads can indeed be problems, but there are solutions to those problems that don’t involve keeping the world’s poor stuck where they are. When critics say that cars are a problem, what they usually mean is that cars are a problem when other people drive them.

Posted on 01/09/08 03:13 PM by Alex Adrianson

Kenya: Where Hesitation Could Be Helpful

The recent elections in Kenya suggest that it might be a good idea for the United States to make sure an election is valid before extending official recognition to a newly elected government. That way the United States doesn’t run the risk lending legitimacy to a government that was really elected through fraud. Heritage experts Brett Schaefer and Steven Groves suggest a policy of waiting three days before recognizing a newly elected government in countries where democratic institutions are not entirely robust. As for Kenya’s situation now, Schaefer and Groves note the importance of a limited role for the United States in resolving the crisis:

Following its initial missteps, the United States has taken the correct actions. It has urged Odinga and Kibaki to rein in their supporters and negotiate a mutually acceptable agreement to resolve the political crisis. The U.S. has sent its Assistant Secretary of State for African Affairs, Jendayi Frazer, to meet with Kibaki and Odinga to forge a compromise solution—an effort that appears to be bearing fruit. …

The solution to the conflict may lie in a recount of the votes, a power-sharing arrangement between Kibaki and Odinga, or a new election. All have been mentioned as possible solutions. But it is critical to acknowledge that Kenya's future is for Kenyans to resolve—not the United States. Thankfully, the U.S. has recognized that if democratic traditions are to become firmly embedded in Kenya, the solution has to be made in Kenya and considered legitimate by Kenyans rather than imposed from outside. Importantly, the U.S. correctly emphasized that such an agreement must conform to the confines of the Kenyan constitution, laws, and institutions if the democratic process is to become more robust rather than weak or ad hoc. …

Posted on 01/08/08 06:33 PM by Alex Adrianson

A House is a House

One reason why the economic impact of the subprime mortgage problem may not be as great as some expect:

[P]eople do not purchase homes primarily as investment vehicles. A share of stock that declines 20 percent loses 20 percent of its utility, while a house that declines in value by 20 percent remains just as useful to live in. Many people do borrow against their houses for business purposes, but since few lenders will let borrowers take out loans for 100 percent of home value—and many will limit borrowers to 50 percent or less—a small decline may not actually have a significant consequence on the amount people can borrow.

For more on why the subprime mortgage problem may be overhyped, see The Subprime Crisis in Historical Perspective by Eli Lehrer and Matthew Glans, published by the Competitive Enterprise Institute.

Posted on 01/08/08 05:56 PM by Alex Adrianson

Kurdistan: Not a Friend to Freedom

Iraqi Kurdistan is not the ally many think it is, says Michael Rubin in a recent article published by the American Enterprise Institute. While the Kurds are relatively pro-American and were helpful in the effort to depose Saddam Hussein, Kurdish leaders, says Rubin, are also undemocratic, corrupt, and uncommitted to political liberalization. What’s more, their hands are not clean. According to Rubin, Kurdish security services—which are heavily politicized and an important mechanism of government control over Kurdish civil society—are complicit in infiltrating Iranian agents into Iraq and of providing support for the terrorist group PKK which has committed acts of terrorism in Turkey.

Rubin observes:

  • Jalal Talabani and Masud Barzani, the two most important Kurdish politicians in the past decade, were both guilty of gross violations of human rights during the 1994-1997 intra Kurdish civil war. Both ordered summary executions of prisoners and many people just disappeared. Today, the two leaders share dictatorial powers.
  • Nepotism and corruption are rampant. Key political supporters and family members are given control of key economic assets. Independent businessmen who refuse partnerships with family members or allies of the government are often imprisoned. Talabani and Barzani have enriched themselves and their families this way.
  • The security services recruit high school and college students to spy on their fellow students. Students who criticize the government are blacklisted for employment and educational opportunities.
  • The courts are heavily politicized and are used to intimidate, bankrupt, and imprison journalists who criticize the government. Kurdish law makes almost all criticism of the government illegal. Government-controlled media frequently target political opponents.
  • The two political parties coordinate election lists so there is no real choice for voters.

The doctrine of Realpolitik holds that the enemy of your enemy is your friend. Now is the time, says Rubin, to recognize how that calculus could backfire:

Because the U.S. government has subsidized both Kurdish leaders, Kurds generally associate their leaders’ misbehavior with U.S. policy. Murmurs of discontent grow when Kurds attribute the abuses by their leaders to U.S. interests: in 2006, for example, when the U.S. government requested space for offices in Sulaymaniyah, Talabani evicted a technical college without advance notice, let alone due process, angering a broad swath of the population. Kurds also accuse U.S. officials of complicity in torture at what they suspect is a center for rendition at a Saddam-era facility between Tasluja and Paramagrun. While Kurdish officials trumpet their public’s pro-American outlook, such an orientation is fading fast. Anti-Americanism has taken hold within Iraqi Kurdistan. Not recognizing it now and taking measures to correct it will negatively impact U.S. strategic opportunities down the line.

Posted on 01/08/08 05:28 PM by Alex Adrianson

It’s the Mandates!

Tarren Bragdon has a question for Presidential candidate, New York Senator, and government health care proponent Hillary Clinton:

Why does New York spend more on Medicaid—a health-care program for the poor—than every other state but still have a larger portion of its population walking around without health insurance than states that spend far less?

Last year, New York spent $48 billion on Medicaid. That amounts to about $2,100 for every man, woman and child. Yet 13.5% of the state’s population lacks health insurance. Pennsylvania, meanwhile, spent closer to $1,300 on Medicaid for every state resident and ended up with an uninsured rate of 10.5%.

New York is the third-largest state in the union and about as good a laboratory as we’ll find for the national health-care market. It has 2.2 million adults and 367,000 children without health insurance. Over the past decade, the state has attempted to reduce the number of uninsured residents by expanding eligibility for government-sponsored health care. This approach is not solving the uninsured problem.

A better solution, says Bragdon, is to eliminate mandates—such as community rating, and guaranteed issue—that drive up rates for the healthy as well as mandates requiring coverage for specific services, which adds about 12 percent to the cost of a health insurance plan in New York. “The evidence suggests,” says Bragdon, “that almost everybody could buy private insurance if carriers were allowed to tailor plans to meet consumers’ needs.”

Posted on 01/07/08 05:05 PM by Alex Adrianson

Will Supreme Court Add to Death Penalty Delays?

Delays in carrying out death penalties could get even longer, depending on how the Supreme Court decides a case it will hear this term. Lawyers for Ralph Baze and Thomas Bowling have appealed their clients’ death sentences, arguing that the lethal injection method used by Kentucky is cruel and unusual, and therefore unconstitutional. The method is cruel and unusual, say the lawyers, because other methods could be used that carry less risk of inflicting pain. Baze was convicted of murder for shooting two police officers in the back. Bowling was convicted of murder for ramming a parked car and then shooting to death a man and a woman, while wounding their child.

In an amicus brief, the Criminal Justice Legal Foundation points out that the Supreme Court is being asked to create a moving target for what satisfies the prohibition against cruel and unusual punishment. Methods deemed constitutional today could be judged unconstitutional whenever a less painful method of execution is developed. That standard would create potential new grounds for appeal in every death penalty case—in spite of the fact that Congress has already acted to limit such appeals in the Antiterrorism and Effective Death Penalty Act of 1996. Says CJLF:

Repeatedly moving the goal posts in constitutional law has a serious, adverse impact on the right of the people to govern themselves through the democratic process. The model of a bicameral legislature with executive veto created for the federal government, see U. S. Const., Art. I, § 7, and copied in most states was intentionally created to make legislation difficult, because the legislature was considered the most dangerous branch. See The Federalist No. 48, p. 309 (C. Rossiter ed. 1961) (J. Madison); id., No. 62, pp. 378-379 (J. Madison). A minority which cannot enact its view into law can sometimes block legislation. Once legislation has been enacted, though, the constitutional design requires that it remain the law until it is repealed. The majority should not have to repeatedly jump the enactment hurdle to maintain a law in effect.

Yet that is exactly what happens when courts move the goal posts so as to render unconstitutional a law that conformed to the understanding of the Constitution at the time the law was enacted.

CJLF also points out that the prohibition against cruel and unusual punishment does not grant the condemned a right to a pain-free death. Capital punishment is, after all, still punishment.

Posted on 01/07/08 04:15 PM by Alex Adrianson

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