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InsiderOnline Blog: October 2007

Senate Looks at LOST

Tomorrow the Senate Foreign Relations Committee is expected to vote to recommend ratification of the United Nations Convention on the Law of the Sea—also known as the Law of the Sea Treaty (LOST). Consideration by the full Senate would occur on Thursday.

If the United States accedes to the Law of the Sea Treaty, it will give an international, unelected, and unaccountable body the power to make decisions affecting both the U.S. military and private companies.

The treaty gives taxing and regulatory powers over deep sea mining activities to an entity called the International Seabed Authority. This is not a mere safety or environmental agency. ISA runs a redistributionist economic system in which companies that want to engage in deep sea mining must hand over resources and technology to the ISA.

LOST includes many provisions that could interfere with U.S. military activity, including a provision that reserves the oceans for peaceful purposes only. LOST also prohibits using other countries’ territorial waters to collect intelligence or conduct other military operations. U.S. submarines would be required to travel on the surface while in another country’s territorial waters.

LOST also includes imprecise obligations for signatories to protect the oceans from pollution. Foreign countries or environmental activists who think our laws are inadequate may see in LOST the grounds for legal challenges to international tribunals over which we have little influence. Unelected bureaucrats would then be second-guessing U.S. laws—laws passed by our democratically elected representatives—and making judgments that impose costs on the American economy—on American citizens.  

If the United States agrees to the treaty, it will have one vote out of 155. And disputes arising out of LOST would be handled through mandatory, binding dispute resolution. The United States would have little ability to influence those decisions.

Supposedly LOST is necessary to protect American navigation rights at sea. LOST has been in effect since 1994 without the United States as a signatory. Have we been unable to do what we want at sea since then?

Here are some resources for learning more about the Law of the Sea Treaty:

Here’s Heritage’s Steven Groves discussing LOST:

See also for much more detail on all the problems with the Law of the Sea Treaty.

Posted on 10/30/07 02:44 PM by Alex Adrianson

California Fires: The Role of Environmental Regulations

Why so many fires in Southern California? The Washington Post reports:

As much as they blame Santa Ana “devil winds” and record dryness, ecologists, climate researchers and firefighters say that the towering, uncontrollable conflagrations of the past week gorged themselves on huge stocks of natural fuel that were the result of a decades-old policy of fighting every blaze in sight, including small blazes that, left alone, would have burned themselves out.

Bill Patzert, a climatologist at the Jet Propulsion Laboratory in Pasadena, acknowledged the paradox of the consensus he was about to state: “We fight too many fires.”

At American Thinker, John Berlau of the Competitive Enterprise Institute points to fuel-laden forests as the culprit, too, but Berlau also identifies environmental regulations as the underlying cause. The Endangered Species Act, he says, gets in the way of prudent fire precautions. Says Berlau:

An example of the legal strait jacket that homewoners faced in the areas hit by the fires is the “brush management guide“ on the City of San Diego web site. The confusing instructions state that vegetation within 100 feet of homes in canyon areas “must be thinned and pruned regularly.” But then, the same sentence goes on to state that this must be achieved “without harming native plants, soil or habitats.”

Then in fine print at the bottom of the page, the real kicker comes in:

Brush management is not allowed in coastal sage scrub during the California gnatcatcher nesting season, from March 1st through August 15th. This small bird only lives in coastal sage scrub and is listed as a threatened species by the federal government. Any harm to this bird could result in fines and penalties.

Coastal sage scrub is a low plant ubiquitous near coastal California that grows like a weed under almost any condition. And since gnatcatcher nesting season lasts almost six months, there could be much buildup of sage scrub that becomes hard for homeowners to control. Especially since the maintenance rules severely restrict the use of mechanical brush-clearing devices even when gnat nesting season is over.

Berlau also notes that environmental regulations have played a role in previous waves of California fires, too.

Southern California homes were lost in 1993 after the federal Fish and Wildlife Service told homeowners that mechanical clearing of brush would likely violate the Endangered Species Act. The reason: it could alter the habitat of a newly-listed endangered species called the Stephens kangaroo rat.


California’s Blue Ribbon Fire Commission, which had been created after wildfires in 2003 by then-Governor Gray Davis and whose members included Sen. Dianne Feinstein, D-Calif., as well as state legislators of both parties, concluded that “habitat preservation and environmental protection have often conflicted with sound fire safe planning.”

Of course, it doesn’t really help kangaroo rats and gnatcatchers to have their habitats destroyed by fire either.

Posted on 10/29/07 06:07 PM by Alex Adrianson

This Week on the Hill – Monday, October 29, 2007

Posted on 10/29/07 02:19 PM by Alex Adrianson

The Coming Week – Monday, October 29, 2007

Monday: Look again at the moral arguments for the welfare state. The Cato Institute hosts Daniel Shapiro, author of Is the Welfare State Justified?

Tuesday: Learn how a healthy agriculture sector is a vital component of a developing economy. C. Peter Timmer delivers the Henry Wendt Lecture at the American Enterprise Institute.

Tuesday: Examine whether open access and unbundling mandates make for good telecommunications policy. The Free State Foundation and the Institute for Policy Innovation host The Federal Unbundling Commission, featuring Sen. Jim DeMint (R-S.C.) and Rep. Marsha Blackburn (R-Tenn.). 

Friday: Tune in to The Ultimate Resource and learn why the poor need capitalism the most. The show airs at 8 p.m. on PBS. Catch the preview right now.

Friday: Attend a colloquium on the President who made Americans see big government as a savior. The Ashbrook Center hosts Jean Edward Smith, author of FDR.

Friday: Discover how William P. Clark, confidant and adviser to Ronald Reagan, helped Reagan change first California and then the world. The Heritage Foundation hosts Paul Kengor, author of The Judge: Ronald Reagan’s Top Hand.

Posted on 10/26/07 01:03 PM by Alex Adrianson

Heritage on Video

Heritage in Focus: The Family and Medical Leave Act needs tweaking to prevent it from being the Fridays and Mondays Leave Act … The Law of the Sea Treaty undermines U.S. sovereignty and interferes with U.S. military operations.

At Heritage: What makes nonprofits great?Cuban hostility to U.S. interests has reached a new high point.

Posted on 10/26/07 01:02 PM by Alex Adrianson

Comedy: What Congress Does Best

Heritage produced the data. Somebody else made it funny:

Hat tip: Friends of ATR

Posted on 10/26/07 12:55 PM by Alex Adrianson

Not All News Is Global Warming News

As California burns, some environmentalists claim that global warming is the culprit. On the surface, that’s a plausible theory. Warming increases drought which makes forest fires more likely.

In his latest Junk Science column, Stephen Milloy points out that the facts don’t fit that theory.  

Comparing the southern California drought record against the global temperature record reveals the following:

— During the period 1900-1940, when most of the 20th century's one-degree Fahrenheit temperature increase occurred, there were 7 years of moderate-to-severe drought.

— During the period 1941-1975, when global temperatures cooled, giving rise to concerns of a looming ice age, there were 11 years of moderate-to-severe drought.

— During the period 1976 to 1990, when global temperatures rose back to the 1940 level, there were 8 years of moderate-to-severe drought.

— Since 1991, when global temperatures rose slightly past the 1940 levels, there have been 7 years of drought.

It's a record that would seems to largely prevent any simple conclusions from being drawn—that is, rising temperatures with few drought years, followed by falling temperatures and increasing drought frequency, followed by temperatures rising back to the original levels with increased drought frequency, followed by a leveling off of drought occurrence despite higher temperatures.

Milloy also points out that the federal government could make life- and property-threatening fires less likely by simply thinning the forests. That’s a plan that would not require the trampling of property rights, imposing limits on energy consumption, or dictating consumer choices. But maybe that’s why environmentalists don’t embrace that plan.

Posted on 10/26/07 11:39 AM by Alex Adrianson

Trade’s Impact on the U.S. Economy

Trade is good for the U.S. economy, per a new analysis by Dan Griswold of the Cato Institute:

  • Trade has had no discernible, negative effect on the number of jobs in the U.S. economy. Our economy today is at full employment, with 16.5 million more people working than a decade ago.
  • Trade accounts for only about 3 percent of dislocated workers. Technology and other domestic factors displace far more workers than does trade.
  • Average real compensation per hour paid to American workers, which includes benefits as well as wages, has increased by 22 percent in the past decade.
  • The net loss of 3.3 million manufacturing jobs in the past decade has been overwhelmed by a net gain of 11.6 million jobs in sectors where the average wage is higher than in manufacturing. Two-thirds of the net new jobs created since 1997 are in sectors where workers earn more than in manufacturing.
  • The median net worth of U.S. households jumped by almost one-third between 1995 and 2004, from $70,800 to $93,100.

Posted on 10/25/07 05:03 PM by Alex Adrianson

Protecting Broadband Consumers: Choices or Regulation?

Last Friday, the Associated Press reported that Comcast has been blocking some traffic on its networks. Does this news mean that we need a government policeman to make sure everyone plays fair on the Internet—i.e. network neutrality rules?

Specifically, AP found that Comcast disrupts traffic between peer-to-peer file sharing platforms BitTorrent, Gnutella, and perhaps others. The twist in the story is that Comcast’s method involves forging messages that make it appear that disruptions are caused by normal network congestion instead of active management by Comcast.

According to net neutrality supporters, Comcast’s behavior shows the need more than ever for their championed policy. Comcast, meanwhile, says that it must limit traffic from file-sharing platforms which otherwise would hog too much bandwidth and diminish the service provided to other customers.

How to balance the different consumers interests here? That’s usually what markets do, and they do it much better and more nimbly than regulators. But the problem with broadband is that sometimes there isn’t competition. Ryan Radia at Open Market says:

Thanks to burdensome FCC regulations and rent-seeking local officials, lots of people (including myself) have no choice but cable Internet—DSL, satellite, and fixed wireless are not options. If Americans could choose among competing broadband providers, the traffic shaping issue would be irrelevant, and customers dissatisfied with Comcast’s policies could simply switch to another provider.

Net neutrality is a step in the wrong direction. Shortsighted policymakers created this dilemma in the first place by granting monopoly rights to cable companies. More regulation will only stifle innovation and reduce investment. The way to solve America’s broadband woes is to lift regulations and abolish franchise agreements which have prevented competition and restricted consumer choice.

However, it should be noted that in many places competition in broadband service is alive and well. According to figures it released today, Comcast added 450,000 new subscribers to high-speed Internet—down from 538,000 a year ago. Between the Lines blog says the reason for Comcast’s disappointing results is that AT&T and Verizon have taken potential customers away from Comcast.

More competition is good news.

Posted on 10/25/07 03:50 PM by Alex Adrianson

Happy United Nations Day!

The United Nations, no doubt, has received a lot of fine sentiments printed up by Hallmark today. It is, after all, United Nations Day. You didn’t forget, did you?

No matter. Who can top the high praise given the United Nations by former Ambassador John Bolton, anyway? In a recent lecture at The Heritage Foundation, Bolton said the United Nations advances the cause of freedom “minimally or occasionally or—perhaps, more precisely—accidentally, at times.”

OK, perhaps Bolton thinks there is room for improvement:

I think there's one reform that we should focus on, and that is to shift the funding of the U.N. system away from the current system of assessed contribu­tions toward a system of voluntary contributions. The way it works now is you take the U.N.'s budget or the budget of each of the specialized agencies and, through a complex formula, allocate percentages to each member government as to what they pay. The U.S. share of the budget in the U.N., and most of the specialized agencies, is 22 percent. We pay 27 per­cent of peacekeeping; that is the highest assessment by a long way. And the shares go down to an almost infinitesimal amount, so I gave you the statistic on that vote on Kofi Annan's reforms. The lowest assessed share for the regular budget—get this, we pay 22 percent—is 0.001 percent. Last year, just for the fun of it, I added up the assessed shares, starting from the bottom, to get to 97; there are 192 in the General Assembly, so 97 is a majority. So, starting at the bottom, I added up the 97 countries, the lowest assessments for the 97 countries, and it came to 0.23 percent of the total budget.

So, in other words, the lowest 97 countries, an absolute majority of the General Assembly, basically amount to less than one-third of 1 percent of the total budget. We're roughly 65 to 70 times more: We're paying more than a majority of the 97 coun­tries of the 192. What that has created is a kind of entitlement mentality, and as long as they think we're on the hook for that amount of money, I don't think they're ever going to pay as much attention to us as they should.

Posted on 10/24/07 03:59 PM by Alex Adrianson

Socialism Proposed for the Oceans

Socialism’s been a failure pretty much everywhere it’s been tried, but that hasn’t stopped people from proposing it for new places. Tomorrow, the Senate Foreign Relations Committee will vote on the Law of the Sea Treaty, which, among many other problems, creates a socialist economic system for the mineral resources in the ocean. Doug Bandow, in an analysis for the Competitive Enterprise Institute, has a succinct summary of how it works:

Perhaps inspired by “Star Trek,” the LOST also created an entity called the Enterprise, which would mine the ocean floor—with the coerced assistance of Western mining companies—on behalf of the Authority.

The convention explicitly limited resource development and promised to protect developing countries from the lower prices that would result from minerals production. Essentially, it authorized an OPEC-style commodity cartel.

The details spelled out were as bad as the principles. Private companies had to survey two sites and turn one over gratis to the Enterprise; they also were required to transfer technology to the Enterprise and to developing states. American miners would be targeted by anti-density and antimonopoly provisions, while developing nations would dominate the Authority. Western governments would be required to enforce payment of fees and royalties, subsidize the U.N.’s mining operation, and provide resources for redistribution to Third World governments and pseudo-national entities like the Palestinian Liberation Organization (now the Palestinian Authority).

The problems with such a system are numerous. It would empower an inefficient international organization and incompetent—often kleptocratic—Third World governments, setting poor precedents for the development and operation of other multilateral institutions. Establishing a global oceans regulatory system that restricts entrepreneurship would do more than hinder resource development on the seabed; it would deter the production of software, technology, and processes designed for seabed mining or with dual-use capabilities. Finally, a LOST-like regime would discourage exploration of other currently unowned resources, most notably space. Although the treaty’s economic impact might have seemed limited, its future adverse effects always would have been enormous. Today, they could be even worse.

Posted on 10/23/07 05:59 PM by Alex Adrianson

This Week on the Hill – Tuesday, October 23, 2007

Posted on 10/23/07 09:41 AM by Alex Adrianson

The Coming Week – Monday, October 22

Tuesday: Have a conversation with Clarence Thomas in Dallas, Texas—and pick up a copy of his new book, My Grandfather’s Son, too. Justice Thomas is hosted by the National Center for Policy Analysis, the Dallas/Fort Worth Committee for Heritage, and the Federalist Society.

Wednesday: Learn how events in Paris, St. Petersburg, and Philadelphia 219 years ago were all connected. Jay Winik discusses his new book The Great Upheaval: America and the Birth of the Modern World—1788 – 1800 at The Heritage Foundation.

Wednesday: Hear Jeb Bush at the Pacific Research Institute’s Annual Gala Dinner in San Francisco.

Wednesday: Find out if you are smarter than a college freshman at the Independence Institute’s Civic Literacy Trivia Night at The Irish Snug in Denver.

Wednesday: Listen to Mart Laar (winner of a Friedman, not a Nobel, Prize) deliver the keynote address at the Acton Institute’s 2007 Annual Dinner.

Wednesday: Discover why government planning always turns out poorly. The Cato Institute hosts Randal O’Toole discussing his book, The Best-Laid Plans: Why Congress Should Repeal Federal Planning Laws.

Wednesday: Explore the connection between political institutions and confidence in property rights. The Mercatus Center hosts a brown bag lecture featuring Prof. Thomas Flores of the University of Michigan.

Thursday: Celebrate the 23rd anniversary of the founding of the Heartland Institute. This year Heartland’s anniversary dinner features a debate on whether Abraham Lincoln was a friend or a foe of American freedom. Joseph A. Morris, president of the Lincoln Legal Foundation, argues Lincoln was a friend, while Thomas J. DiLorenzo, author of Lincoln Unmasked and The Real Lincoln, argues our 16th President was a foe.

Thursday: Get an overview of entrepreneurship in education at the American Enterprise Institute.

Friday – Saturday: Discover Reason in D.C. at the Ritz Carlton.

Saturday: Assess the state of higher education by attending the Annual Pope Center Conference. The featured speaker is Harry Lewis, former dean of Harvard College and author of Excellence Without a Soul: How a Great University Forgot Education. Lewis asks: Does liberal education have a future?

Posted on 10/18/07 11:41 PM by Alex Adrianson

Heritage on Video

Heritage in Focus: Throwing military contractors out of Iraq is a terrible idea.

At Heritage: Can homeowners get rationally-priced insurance? … If Russia wants foreign investors, it needs to provide greater transparency … What will it take to make Afghanistan stable? … The proposed inclusion of China's Huawei Technologies in a purchase of 3Com raises important national security questions Schools in middle-class areas aren’t as good as people think they are … Is the new National Strategy for Homeland Security up to its task?

Posted on 10/18/07 11:36 PM by Alex Adrianson

Administrative Cost Argument Is a Trojan Horse

Advocates of single-payer health care like to argue that private insurance is wasteful because it has high administrative costs compared to a one-size fits all government health care system. If we could just eliminate administrative costs, they argue, then we could afford to cover everyone in a universal health care system. But anybody with an ounce of economic sense should suspect right away that something is wrong with that argument: Nobody forces private insurers to spend all that money on administrative costs. There must be some benefit to it.

In a piece at National Review Online, the Manhattan Institute’s Benjamin Zycher unravels the mystery. He points out that all that administrative activity is what keeps insurers competitive with each other.

… market forces provide powerful incentives for insurers to invest resources in underwriting, that is, the evaluation of individuals and groups in terms of the costs that those consumers can be expected to impose upon the system. Unless regulations or other legal constraints prevent or impede such underwriting efforts, insurers will be forced by market pressures to align premiums with costs, because insurance cannot be a charitable endeavor in a world in which consumers predictably opt for premiums lower rather than higher.

Insurers also bear substantial administrative expenses in efforts to scrutinize claims, to ensure that the services for which insurance coverage is claimed actually are included in the insurance contract, and that the prices demanded by providers are within the limits specified in provider contracts. These efforts reduce costs, which otherwise would have to be spread among policyholders who would in turn shift to other insurers devoting greater effort to such administrative activity, and thus would be able to charge lower premiums.

Only a health care system that exists explicitly to cross-subsidize some at the expense of others can avoid such administrative costs. But such a system imposes a different set of costs on health care consumers. In a system that redistributes wealth, says Zycher,

there is no reason to expect the winners to be those most “deserving” by any defensible definition. Instead, it is the middle class that will be drawn into a politicized system, the middle class that will suffer the effects of an inexorable decline in health-care quality, and the middle class that will pay, with the Beltway taking a generous commission.

Posted on 10/18/07 11:31 PM by Alex Adrianson

Global Warming Politics at the Security Council

Does it really matter that a bunch of lefty political appointees in Norway voted to give Al Gore a Nobel Peace Prize? On Wednesday, the Czech Republic narrowly lost to Croatia for a seat on the United Nations Security Council. (Libya was also given a seat this year.)

According to the Times of India:

Some diplomats said privately that the Czech Republic lost because of President Vaclav Klaus’ skeptical comments about global warming, which is a key issue for many UN members, especially small island states. In a statement last week, Klaus said he was “surprised” that former US Vice President Al Gore shared the Nobel Peace Prize “because a link between his activities and the global peace is unclear and blurred.”

Posted on 10/18/07 11:28 PM by Alex Adrianson

Government Lending Not So Good Either

Continuing turmoil in the mortgage market has inspired the usual howls to the effect that we need government to fix the failures of the marketplace. E.g.: Supposedly we need more government-backed lending from the Federal Housing Administration in order to reduce the need for risky private lending to borrowers with less than stellar credit.

In the Wall Street Journal, John Berlau of the Competitive Enterprise Institute points out how the Federal Housing Administration makes the same errors as private lenders. He finds:

By its own estimate, next year the agency expects to be in the red, paying out more for defaulted loans than borrowers pay to it in insurance premiums. “Because of adverse loan performance,” the FHA states in its budget submission for 2008, “total costs exceed receipts on a present value basis, and therefore would require appropriations . . . to continue operation.”


For the past three years, delinquency rates on the oh-so-safe mortgages insured by the FHA have consistently been higher than even those of the dreaded subprime mortgages. In the last quarter of 2006, for instance, the delinquency rate for subprimes had increased to 13.33% in the National Delinquency Survey compiled by the Mortgage Bankers Association. But in the FHA category, the rate had risen to 13.46%—“a   new record.”

The explanation:

Part of the answer rests in a foolish quest to compete with the private sector for “market share.” In both the Clinton and Bush administrations, the FHA’s response to private alternatives for low-income borrowers was to aggressively compete with them—by making the agency’s own lending standards even more “subprime” than those of the private sector.

Posted on 10/18/07 11:27 PM by Alex Adrianson

Economic Growth Is a Solution, Not a Problem

At Capital Commerce blog, James Pethokoukis puts global warming in perspective by pointing out that reasonable assumptions of economic growth over the next century could produce a global economy of $550 trillion per year. That’s $300 trillion more than the modest assumptions of the Intergovernmental Panel on Climate Change.

I don’t know about you, but give me a century of accelerating technological change and $300 trillion to pay for it, and there are few problems that would keep me up at night. So the question is: Which policies will get us there?

Probably not policies that place limits on the use of energy.

Posted on 10/16/07 02:23 PM by Alex Adrianson

Blackwell: Expanding SCHIP Is Bad for Kids

Ken Blackwell of the Buckeye Institute has a good commentary about the State Children’s Health Insurance Program (SCHIP). He explains how expanding it to middle-class kids will move our health care system a step closer to a single-payer system that would destroy quality health care:

The big-government approach would abolish private insurance. This approach would have citizens pay more taxes to the government, which then becomes the sole source of income for health care providers. The government would then have all the leverage needed to tell those working in health care what to do and how to do it.

Government-run systems waste countless of billions of dollars and take decisions away from patients and doctors, putting them in the hands of government bureaucrats. Medical careers then pay less and attract less-talented people. Lack of incentives hurt research and development of new medicines and techniques. And, lack of accountability means lower quality of care and fewer choices for patients. The whole system suffers.

The bill President Bush vetoed was a step in that direction. With SCHIP expansion into the middle class, government’s role increases. A critical mass of middle-class voters, dependent upon SCHIP for care, would demand broader coverage for more people. Within a generation, enough voters would be on it that popular support would be there for government-run health care. That’s the political game plan.

This could happen because the free health care comes right away. It takes more time to exhaust private resources, drive talented people from the health care field, and build an established bureaucratic mindset. Aside from immediate delays, the quality of care might be acceptable at first. But, after the system is federalized and becomes run down, it may be too late to reverse. Think Canada and Great Britain.

We need more people making exactly this sort of argument: SCHIP is not a green-eyeshades budget issue; it’s a health care issue. Expanding SCHIP is bad for health care, and bad for kids.

Posted on 10/16/07 01:33 PM by Alex Adrianson

Iraq: Some Data

From the Washington Post:

In September, Iraqi civilian deaths were down 52 percent from August and 77 percent from September 2006, according to the Web site The Iraqi Health Ministry and the Associated Press reported similar results. U.S. soldiers killed in action numbered 43 – down 43 percent from August and 64 percent from May, which had the highest monthly figure so far this year. The American combat death total was the lowest since July 2006 and was one of the five lowest monthly counts since the insurgency in Iraq took off in April 2004.

From U.S. News and World Report:

Nationwide, the Iraqi government reported 827 civilian deaths in September, a still-painful toll but half the number in August and the lowest level in more than a year. U.S. military deaths totaled 66, the lowest monthly number since August 2006.

Seems like the surge is working.

Posted on 10/16/07 01:02 PM by Alex Adrianson

Ethanol's Threat to the Environment

The unintended consequences of ethanol subsidies, per a new report by the National Research Council:

… agricultural shifts to growing corn and expanding biofuel crops into regions with little agriculture, especially dry areas, could change current irrigation practices and greatly increase pressure on water resources in many parts of the United States. …

… The switch from other crops or noncrop plants to corn would likely lead to much higher application rates of highly soluble nitrogen, which could migrate to drinking water wells, rivers, and streams, the committee said. When not removed from water before consumption, high levels of nitrate and nitrite—products of nitrogen fertilizers—could have significant health impacts.

Nutrient and sediment pollution in streams and rivers could also both be attributed to soil erosion. High sedimentation rates carry financial consequences as they increase the cost of often-mandatory dredging for transportation and recreation.

Posted on 10/16/07 12:43 PM by Alex Adrianson

This Week on the Hill – October 15, 2007

Posted on 10/15/07 03:48 PM by Alex Adrianson

An Alternative to Expanding SCHIP

Will Congress push more children out of private health insurance and into public coverage? That’s what’s at stake later this week when Congress votes on whether to override President Bush’s veto of a bill expanding the State Children’s Health Insurance Program. If Congress does override the veto, states will be allowed to use SCHIP money to enroll middle-class children in a program originally intended to help poor children. Many of those middle-class children already have private coverage, so making them eligible for the program would give families an incentive to drop private coverage and sign up for the free public coverage instead—even though such coverage may not be as good as the private plans families already have.

Right now, it appears that a vote to override will fail in the House. If that happens, then the question becomes: “What’s next?”

SCHIP was originally intended to cover children from families with incomes between 100 percent and 200 percent of poverty level. The current dispute is over whether SCHIP should be available to children from families above 200 percent of poverty level. The Heritage Foundation has proposed an alternative that would keep SCHIP as a program for kids in families between 100 percent and 200 percent of poverty level while extending assistance through a tax credit to families earning between 200 percent and 300 percent of poverty level. The virtue of the tax credit approach is that is doesn’t move kids from private coverage into public coverage. Families can claim the credit, while keeping the coverage they already have or buying private insurance through their employer or on the individual market.

The Heritage plan suggests a tax credit in the amount of $1,200. According to estimates by the Lewin Group, about 9 million children live in families that would be eligible for the credit, including 1.3 million who are currently uninsured.

Adopting this tax credit approach would be a small but important step in the right direction on health care. Instead of expanding government control over health insurance decisions, it would keep those decisions with families.

For more information, see Stuart Butler and Nina Owcharenko’s paper, “SCHIP Plus a Tax Credit: A Compromise Health Insurance Plan for Kids,” Web Memo No. 1652, October 1, 2007.

Posted on 10/15/07 03:19 PM by Alex Adrianson

The Coming Week – Monday, October 15, 2007

Monday: Find out why the middle class needs school choice. The Heritage Foundation hosts Lance Izumi and Vicki Murray of the Pacific Research Institute.

Monday: Explore the state of U.S. civil-military relations. The Foreign Policy Research Institute and the Reserve Officers Association host an all-day conference.

Tuesday: Hear Michael Barone assess the 2008 political season at the National Center for Policy Analysis’s Hatton W. Sumners Distinguished Lecture Series.

Wednesday: Check up on tax issues in the states. The State Tax Working Group meets at the Tax Foundation. Contact Tonya Barr for call-in information.

Wednesday – Thursday: Stay abreast of issues in environmental law, regulation, policy, and technology best practices. Attend the annual Northwest Environmental Summit hosted by the Washington Policy Center.

Thursday: Assess whether discriminatory tax treatment of out-of-state municipal bonds constitutes an unconstitutional interference in interstate commerce. The American Enterprise Institutes hosts a panel looking ahead to the Supreme Court hearing of Davis v. Kentucky Department of Revenue.

Friday – Sunday: Learn how to change the culture through political action at the Family Research Council’s Values Voters Summit.

Posted on 10/10/07 03:54 PM by Alex Adrianson

Lomborg: Look for Alternatives to Cutting Carbon

We need, says Danish scientist Bjorn Lomborg, to get away from our fixation on cutting carbon emissions now.

Writing in the Washington Post, Lomborg accepts that some global warming is occurring, but says the warming is not catastrophic and does not warrant the costly policy of immediate and significant cuts in carbon emissions. He points out:

  • The typical cost of cutting a ton of carbon dioxide is currently about $20, but the damage from a ton of carbon in the atmosphere is only about $2. “Spending $20 to do $2 worth of good is not smart policy. It may make you feel good, but it’s not going to stop global warming.” Instead of cutting emissions now, it would make more sense to spend 0.05 percent of gross domestic product exploring non-carbon emitting technologies. That would add up to $25 billion per year, but would still be seven times cheaper than implementing the Kyoto Protocol.
  • By 2050, estimated global warming will cause and extra 400,000 heat-related deaths per year, but 1.8 million fewer people will die from cold weather. “The Kyoto Protocol, with its drastic emissions cuts, is not a sensible way to stop people from dying in future heat waves. At a much lower cost, urban designers and politicians could lower temperatures more effectively by planting trees, adding water features and reducing the amount of asphalt in at-risk cities. Estimates show that this could reduce the peak temperatures in cities by more than 20 degrees Fahrenheit.”
  • Global warming is expected to increase the risk of getting malaria by about 3 percent over this century, but implementing Kyoto is expected to reduce the malaria risk by just 0.2 percent. “On the other hand, we could spend $3 billion annually—2 percent of the protocol’s cost—on mosquito nets and medication and cut malaria incidence almost in half within a decade. … [F]or every dollar we spend saving one person through policies like the Kyoto Protocol, we could save 36,000 through direct intervention.”
  • Polar bears are threatened by global warming, too, but Kyoto would save just one bear per year. According to the World Conservation Union, outlawing the hunting of polar bears would save between 300 and 500 every year.

Lomborg concludes:

Combating the real climate challenges facing the planet—malaria, more heat deaths, declining polar bear populations—often requires simpler, less glamorous policies than carbon cuts. We also need to remember that the 21st century will hold many other challenges, for which we need low-cost, durable solutions.

I formed the Copenhagen Consensus in 2004 so that some of the world’s top economists could come together to ask not only where we can do good, but at what cost, and to rank the best things for the world to do first. The top priorities they’ve come up with are dealing with infectious diseases, malnutrition, agricultural research and first-world access to third-world agriculture. For less than a fifth of Kyoto’s price tag, we could tackle all these issues.

Posted on 10/10/07 03:50 PM by Alex Adrianson

Public Policy: The Movie

The Atlas Foundation wants to give away $10,000 to an aspiring filmmaker to produce a video that will help one of its think tank partners get its message out.

In order to win the prize, you first need to convince them to give you one of five $2,000 prizes to produce a YouTube short on one of five possible topics. Atlas will then award the $10,000 prize to one of the five winners of the $2,000 prizes. The deadline for submitting your idea for one of the $2,000 prizes is October 15. Get the creative juices flowing and check the Atlas site for information on the five possible topics.

And keep this advice from Atlas in mind:

Remember, one of the goals of this project is to take the good—but often dry—work of public policy think tanks and make it interesting and appealing to a broader audience. We hope you can find a way to make people laugh, or to reach for the nearest Kleenex.

To enter, send a one-page description of your idea for a video and a resume to Christian Robey at

Posted on 10/10/07 03:06 PM by Alex Adrianson

Is Proficiency an Illusion?

The No Child Left Behind Act was supposed to hold public schools accountable for student achievement. Under NCLB, however, each state writes its own tests for determining whether a student is proficient in math and reading. With tens of billions of federal dollars at stake every year, you might think that set-up gives states a bit of an incentive to write easier tests.

A new study by Thomas B. Fordham Foundation and the Northwest Evaluation Association, The Proficiency Illusion, compares student scores on state proficiency tests with those on the nationally standardized assessment Measuring Academic Progress. The study finds that in eight out of 26 states surveyed, proficiency tests have gotten easier since NCLB was passed. That means that schools in those states are not making as much progress on student achievement as the test scores indicate.

Taxpayers shell out about $24 billion a year through No Child Left Behind. It seems that they’ve gotten smoke and mirrors for their investment.

Posted on 10/10/07 02:13 PM by Alex Adrianson

This Week on the Hill – October 9, 2007

Posted on 10/09/07 03:45 PM by Alex Adrianson

The Coming Week – Monday, October 8, 2007

Tuesday: Learn how free markets promote wealth, health, social justice, and peace. The Mackinac Center hosts Deroy Murdock.

Tuesday: Honor Nancy Brinker, founder of Susan G. Komen for the Cure, and Ricky Silberman, founder of the Independent Women’s Forum, at IWF’s 2007 Barbara K. Olson Woman of Valor Award Dinner.

Tuesday: Celebrate policy over politics with the Georgia Public Policy Foundation.

Tuesday: Learn how Taiwan’s free-riding on the U.S. defense budget creates an invitation to Chinese adventure in the Taiwan Straits. The Cato Institute’s Justin Logan and Ted Galen Carpenter discuss how the combination of Taipei’s provocative foreign policy and weak defense spending could catch the United States in the crossfire.

Wednesday: Find out why the state of New York ranks dead last in health ownership. John R. Graham of the Pacific Research Institute discusses the Index of Health Ownership at The Fort Orange Club in Albany, N.Y.

Wednesday – Friday: Hear what the state-based free market think tanks are doing at the State Policy Networks 15th Annual Meeting. The meeting features three days of professional development, leadership training, policy updates and advocacy mobilization workshops.

Thursday: Get a prognosis on mortgage markets and the U.S. economy at the American Enterprise Institute.

Thursday – Saturday: Discover how new media technologies can help you get your message out. That and many other topics are covered at the Conservative Leadership Conference in Reno, Nevada.

Friday: Explore the philosophy of Robert Frost. The Heritage Foundation hosts Frost biographer Peter Stanlis.

Posted on 10/05/07 11:29 AM by Alex Adrianson

Heritage on Video

Heritage in Focus: The United States cannot ignore the anti-democracy crackdown in BurmaReligious practice is associated with positive outcomes for families … A federal judge sides with the ACLU and blocks a common sense measure to enforce immigration laws.

At Heritage: The Fairness Doctrine isn’t fair … Ronald Reagan had some good ideas on Taiwan policy … What role will Europe play?

Posted on 10/05/07 11:26 AM by Alex Adrianson

Looking for Up-and-Coming Non-Profit Leaders

A great opportunity for liberty-minded professionals who want to develop their skills: The Charles G. Koch Foundation is now accepting applications for its 2008 – 2009 Koch Associate Program. It’s a year-long program in which associates will work on significant assignments at free market organizations while also learning from the foundation’s own Market Based Management curriculum. Market Based Management teaches how to apply free market principles to non-profit management.

Also, the Koch Foundation is accepting applications for its internship program, which also focuses on teaching Market Based Management.

Posted on 10/05/07 11:25 AM by Alex Adrianson

On SCHIP: Reporters Should Do Some Reporting

Heritage Foundation experts and other conservatives have said over and over that the problem with Congress’s proposed expansion of the State Children’s Health Insurance Program (SCHIP) is that it creates an entitlement for people who don’t need to depend on government for their health insurance: children from middle-class families.

Proponents of SCHIP expansion, however, have cast the issue as a morality play in which they are the good guys who want to help needy kids and their opponents are the bad guys who want poor children to have no health insurance. In vetoing the bill, President Bush, they say, ignores the screams of millions of uninsured children.

Perhaps that’s just par for the course when it comes to heated political debates. But shouldn’t voters and concerned citizens be able to get the facts about what’s really going on? Where can they turn for unbiased information?

Not the media. As Amy Menafee reports for the Business & Media Institute, many reporters have become partisan players in the debate by simply adopting the talking points of the Left instead of doing their own reporting. Menafee documents numerous instances in which key facts have been left out of media treatment of the issue.

For example, on August 26, ABC News described emergency rooms as the provider of last resort for the uninsured. That same report failed to explain to viewers that coverage under SCHIP is of such low quality that kids on SCHIP are twice as likely to visit the emergency room as the uninsured.

Menafee further notes that many reporters have failed to explain that using higher cigarette taxes to fund the SCHIP expansion hurts low-income folks. As a group, those with lower incomes tend to spend a larger share of their income on cigarettes than do those with higher incomes.

But, as Menafee says, the story is “the perfect combination of sin taxes, nanny-statism and taxpayer-funded welfare—all in the name of the children.” Or maybe, it’s just a matter of reporters needing to not be lazy. Let’s hope so, because if we don’t want citizens to slide further into dependence on government, we’ll need reporters who don’t depend on the talking points of the governing class for their reporting.

Posted on 10/04/07 03:10 PM by Alex Adrianson

A Vindictive Indictment?

Are the powers that be in Oklahoma striking back at efforts to limit government spending?

Yesterday, an Oklahoma grand jury indicted pro-taxpayer activist Paul Jacob for allegedly violating an Oklahoma law requiring that collectors of petition signatures be legal residents. The grand jury also indicted Rick Carpenter, president of Oklahomans in Action, and Susan Johnson, president of National Voter Outreach. Jacob, a Virginia resident, is president of the group Citizens in Charge and a senior fellow at the Sam Adams Alliance. In 2006, Jacob and Carpenter, who is from Tulsa, Okla., paid Johnson to manage the collection of signatures in a petition drive to put a Taxpayers Bill of Rights on the statewide ballot. That petition effort ultimately failed. It was thrown out by the state supreme court, which said that too many of the collected signatures were invalid.

According to Jacob, yesterday’s indictment is part of a campaign of reprisal being conducted by Oklahoma Attorney General Drew Edmondson. Jacob said:

This indictment unsealed today is not about the law, but rather 100 percent politically motivated. This is politics—very ugly politics.  

The highest legal office in the state of Oklahoma seems bent on silencing citizens through harassment and intimidation, threats and coercion. The goal is to silence me, and to frighten you, from petitioning our government.

In a statement responding to the indictment, Jacob made clear that he believes the law in question is unconstitutional, but that in any case, the initiative effort he conducted abided by the law. Said Jacob:

After the Oklahoma Supreme Court’s decision in the TABOR challenge, there’s a new interpretation of the residency statute. The new standard argues that no one who moves to the state to accept a job, no matter how long the duration, is a “genuine” resident unless he is committed to remaining in the state permanently. For example, in the challenge to the TABOR petition, the court ruled that a man who had come to Oklahoma in September of 2005 to circulate the petition and then continued to live in the state for the next ten months was NOT a resident. Thus, the Oklahoma voters who signed his petitions were disenfranchised. 

Under the new requirement of residency there is simply no way for petition companies to adequately determine whether a petitioner is or is not a resident. Therefore, future petition proponents and managers can expect to face criminal prosecution depending on circumstances largely, if not entirely, beyond their control. This is certain to have a chilling effect on petition activity. 

The underlying state statute here is an unconstitutional attempt to deny the First Amendment rights of Oklahoma citizens. I believe it will be and should be struck down. But even so, during the TABOR ballot drive we sought to understand this statute and to abide by it.  

If convicted, Jacob could face both fines and prison time. The case raises important questions about the rights of citizens to conduct petition drives, and all taxpayers should watch closely. A Web site supporting Jacob has been set up at

Posted on 10/03/07 05:57 PM by Alex Adrianson

British Court to Rule Al Gore’s Film Is Propaganda

According to the Daily Mail, the British High Court thinks the science on global warming isn’t settled after all. The justice hearing a challenge to Al Gore’s An Inconvenient Truth has indicated he will rule next week that the controversial documentary may be shown to British public school students only with the warning that the film promotes partisan views and that students shouldn’t necessarily accept the assertions of the film as truth.

The ruling contradicts the assertions of David Miliband, who was Environment Secretary when it was announced earlier this year that the film would be distributed to British public schools. Miliband said “The debate over the science of climate change is well and truly over.”

Stewart Dimmock, a lorry driver from Dover with children aged 11 and 14, had asked the court to ban the showing of the film in public schools because it amounts to political brainwashing. “I wish my children to have the best education possible, free from bias and political spin, and Mr Gore’s film falls far short of the standard required.”

Dimmock said he is disappointed that the court didn’t ban the film from schools outright.

It is good that the court recognizes the questionable science in Al Gore’s film. On the other hand, do we really want courts to decide what constitutes political propaganda? Of course, if British parents could choose their children’s schools, then they wouldn’t need to go to the courts to avoid political brainwashing. Yet another problem school choice could fix.

Posted on 10/03/07 03:38 PM by Alex Adrianson

Washington Post Tries to Explain Subsidies for the Wealthy

In its Sunday edition, the Washington Post has a mostly good story about how, in Fairfax County, Va., some households with six-figure incomes are living in federally subsidized housing. The story is pretty good—until the author tries to explain it:

The fact that higher-income families choose to remain in subsidized housing illustrates the critical lack of affordable housing in Fairfax, named the nation’s most affluent county last month by the Census Bureau. The median new-home price in the region’s largest jurisdiction is $960,000, and the average monthly rent for a two-bedroom apartment is $1,306, according to county data. [Emphasis added.]

And you thought a story about a family making $216,000 a year living in subsidized housing was a story about the misuse of taxpayer funds. Silly you. It’s a story about the misfortune of those who are not quite affluent enough to afford the median home price in the nation’s most affluent county. And since government must ameliorate all misfortunes, well, who can begrudge the top 20 percent of income earners their place at the public trough? (Next we’ll need a federal lunch program for those lobbyists who can’t quite afford to eat at Morton’s everyday!)

Posted on 10/03/07 08:47 AM by Alex Adrianson

This Week on the Hill



Posted on 10/02/07 05:41 PM by Alex Adrianson

Will: SCHIP Is ‘A Proxy Fight over the Future of the Welfare State’

George Will’s latest column is about the State Children’s Health Insurance Program as a stalking horse for expanding dependency on government, and it is excellent. Go read the whole thing, but here’s the money quote:

It has become a verbal tic for politicians to say that everything they do is “about the children.” This rhetoric of pathos reflects the de-intellectualization of public life—the substitution of sentimentalism for reasoned persuasion. Bill Clinton carried this to comic lengths when, in his first State of the Union address, he noted that “not a single Russian missile is pointed at the children of America.”

Those children-seeking missiles were diabolical. The new SCHIP, which would expand the dependency of middle-class children on government, is not diabolical, but neither is it just “about the children.”

Posted on 10/02/07 10:28 AM by Alex Adrianson

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