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InsiderOnline Blog: October 2013

The Healthcare Mash is monstrous:

Pretty catchy, as all Remy videos are, but this send-up isn’t really scary enough to convey the true horror of Perhaps Megadeth in monster costumes performing Symphony of Destruction hits the right note. Death spirals and all.

Posted on 10/31/13 07:58 PM by Alex Adrianson

Social Issues Matter

Ignoring social issues and talking only about economics isn’t a winning formula for conservative candidates, says a new report from the group American Principles in Action. The report contains a lot of data showing that Americans agree with many social conservative views. On abortion, for example:

[A] May 2013 Gallup poll showed that women, independents, and younger voters all favored the GOP position—making abortion illegal in all or most cases—by at least a +17 margin.

For example, 37 percent of men and 40 percent of women say that abortion should be legal in all or most cases, while 59 percent of men and 57 percent of women say that they believe that abortion should be illegal in all or most cases (producing a pro-life advantage of 22 points for men and 17 points for women).

Meanwhile, young voters are the most pro-life generation ever. The May 2013 Gallup poll showed that Millennials (ages 18-34), support making abortion illegal in all or most cases by a margin of 57 percent to 41 percent, a +16 pro-life advantage. They were also the age group most likely to support making abortion illegal in all cases. Only 29 percent of Millennials support the Democratic Party’s position on abortion.

Among Independents in the Gallup poll, 59 percent say that abortion should be illegal in all or most cases compared to 38 percent who say that abortion should be legal in all or most cases, a 21 point pro-life advantage. [Internal citations omitted.] [“Building a Winning GOP Coalition: The Lessons of 2012,” by Francis Cannon, Maggie Gallagher, and Rich Danker, American Principles in Action, October 2013.]

Heritage Foundation fellow Ryan Anderson seconds the notion that the winning conservative message is one that integrates economic arguments with social arguments:

Conservatives must not refuse to talk about social policy. If we conservatives fail to articulate a clear and compelling case on these issues, liberals will caricature our positions. Conversely, conservatives should not fail to highlight the extreme views of liberals on social issues—for instance, supporting taxpayer-funded abortion on demand throughout all nine months of pregnancy.

Public opinion polls on marriage show challenges with the younger generation, of course. But there is no reason to think conservatives cannot rise to the occasion and meet the challenge. After all, the only way to guarantee a political loss is to sit idly by. We should frame our message, strengthen coalitions, devise strategies, and make the case for marriage. Persistent, winsome witness tends to produce good fruit, as it has in the pro-life cause. […]

At the end of the day, economic conservatism and social conservatism spring from the same source. They are grounded in the same principles of natural right and natural law that informed our nation’s Founding—principles that the conservative movement exists to protect. [First Things, October 25]

Posted on 10/29/13 01:32 PM by Alex Adrianson

To Do: Explore Human Progress

Check out the new website, “a comprehensive new research tool that will allow users to explore human development indicators from a variety of sources, compare different indicators with one another, create and share graphics in a visually compelling way, and calculate differences in human well-being between different countries over time.” The Cato Institute product will officially launch at 10 a.m. on October 30 with a discussion at Cato featuring former World Bank President Robert Zoellick.

• If you want to help expose the needless killing of dogs by police, consider donating to Ozymandias Media’s new kickstarter for its documentary Puppycide.

• Grab some popcorn and enjoy the Free Thinking Film Festival. It runs from October 31 to November 3 in Ottawa, Canada, and showcases the fact that in the arts “not everybody is from the left side of the spectrum.” The event includes screenings of Fracknation, Economic Freedom in Action: Changing Lives, and Atlas Shrugged II.

Commemorate the 150th anniversary of the Gettysburg Address, perhaps the greatest speech in American history. Civil War historian and Abraham Lincoln scholar Allen Guelzo of Gettysburg College will speak at noon on November 1 at The Heritage Foundation.

• Figure out if your lifestyle makes you vulnerable to losing your health insurance coverage thanks to Obamacare by checking out the Obamacare Risk Factors Calculator created by Americans for Prosperity.

Discover whether the treaty power threatens our system of limited government. Sen. Ted Cruz (R-Texas) will speak at The Heritage Foundation at 11 a.m. on October 30. The talk is part of Heritage’s “Preserve the Constitution” series.

• Save the date for Resource Bank 2014: March 26 – 28 at the Sheraton New Orleans.

Posted on 10/25/13 05:45 PM by Alex Adrianson

Another Legal Challenge to Obamacare Lurks

Keep your eyes on the case of Halbig v. Sebelius. If it succeeds, Obamacare’s slow-motion implosion would morph into a thundering collapse—at least of the federal health care exchanges. This week D.C. Circuit Court Judge Paul Friedman declined to grant the government’s request to dismiss the case. [Competitive Enterprise Institute, October 22]

That means the plaintiffs will get the chance to make their case that the Affordable Care Act does not actually give the Internal Revenue Service the authority to distribute subsidies or apply penalties in states that chose not to establish their own exchanges. The plaintiffs point to language in the bill that authorizes the tax credits for those in state exchanges; the section of the law creating federal exchanges contains no such language. The employer mandate penalties are triggered when an employee receives the tax subsidy through a state exchange. If those penalties can’t be applied for federal exchanges, one of Obamacare’s main revenue streams goes away.

Tom Miller provides some history one why the law was written the way it was:

The Senate bill not only favored state exchanges; it expected all 50 states to embrace their establishment. When the bill provided for federal exchanges in a separate section of the law to guard against legal challenges that it would otherwise be trying to command states to set up their own exchanges, the Senate was using the potential loss of tax credits for the new insurance coverage as an inducement, if necessary, for states to choose to comply. Thus, the Senate bill authorized the credits for state exchanges, but it chose not to do so for federal ones.

President Obama and his allies nevertheless tried to excuse this issue as just another “glitch” or “bump” in the law that they could work around through regulatory reinterpretation. The IRS tried to accomplish this in its May 2012 final regulation covering this provision. The regulation ignored the clear limitations in the law’s text for premium assistance subsidies. It redefined “exchange” to mean “state exchange, regional exchange, subsidiary exchange, and federally facilitated exchange.” That in effect eliminated the statutory language restricting subsidies to exchanges “established by the state under section 1311” of the ACA.

As Miller points out, Halbig v. Sebelius is just the first of four cases to present this kind of argument:

Many federal judges still tend to defer to executive branch discretion in implementing vague or inconsistently written federal laws, particularly when the alternative involves calling a sudden halt to implementation of a president’s top domestic policy objective. But it will only take one judge committed to the rule of law to start releasing the air out of the Obamacare balloon. [The American, October 21]

Posted on 10/25/13 05:09 PM by Alex Adrianson

Cronyism Pays

Politically connected banks were more likely to get bailouts under the 2008 TARP program, finds a statistical analysis by Benjamin Blau:

Univariate tests show that banks that participated in the Fed’s emergency loan programs had lobbying expenditures (during the 10 years before the financial crisis) that were more than 72 times greater than the lobbying expenditures of banks that did not participate in the programs. I also find that banks that had employed politically connected individuals were more likely to receive emergency loans than banks that had not employed politically connected individuals.

I use robust econometric specifications to determine whether the univariate results hold after controlling for banks’ balance sheet structure and other measures of bank riskiness. Multivariate tests show that banks that had lobbied during the 10 years before the financial crisis were 10.02–16.93 percent more likely to receive emergency loans than banks that had not lobbied. Further, the tests show that banks that had employed politically connected individuals were 10.21–16.46 percent more likely to receive loans than banks that had not employed politically connected individuals. In other tests, I show that banks with political connections were in debt to the Fed a greater number of days as well as by a greater amount than banks without political connections.

Blau does not believe the explanation is as straightforward as the Fed wanted to provide favors to the politically connected. Rather, he suggests that politically connected firms believe their political connections protect them from unexpected financial difficulties, which makes them more willing to take risks, and banks that took more risks were the ones who needed bailouts. [“Central Bank Intervention and the Role of Political Connections,” by Benjamin Blau, Mercatus Center, October 2013]

Posted on 10/25/13 03:55 PM by Alex Adrianson

Things You Might Not Have Known About Taxes

The Tax Foundation’s recent book of charts is very educational. For example, you might be surprised how often millionaires earn a million in a year:

And did you know that tax loopholes for special interests are a surprisingly small sliver of the total “tax expenditures” in the tax code?

For more, see “Putting a Face on America’s Tax Returns: A Chart Book,” edited by Scott A. Hodge, Tax Foundation, 2013.

Posted on 10/25/13 02:46 PM by Alex Adrianson

A Smattering of Disaster News

• can’t tell you whether the navigators it lists to provide you with assistance with Obamacare are actually authorized to assist you with Obamacare. The navigators are supposed to tell you whether they are authorized when you call them. [PJMedia, October 23]

• “The Obama administration asked North Dakota’s largest health insurer not to publicize how many people have signed up for health insurance through a new online exchange, a company official says. […] Still, a spokeswoman from Blue Cross Blue Shield says about 14 North Dakotans have signed up for coverage since the federal exchange went live Oct. 1. That brings total statewide enrollment to 20 – less than one a day.” [Infororum, October 22]

• Welcome to the Department of Obamacare:

• This chart from Alex Marchant might explain some things. It shows how many lines of code are in different types of software:  

• Consumer Reports has some tips for people trying sign up on It’s a list that reveals some of the things that are wrong with the website. CR points out, for example, that you should clear your cookies after you create an account but before you move on to the identity verification section. That’s because a design flaw is causing to choke on its own cookies. But the main bit of advice is: “Stay away from for at least another month if you can,” says the magazine. “Hopefully, that will be long enough for its software vendors to clean up the mess they’ve made.” (It doesn’t sound like is going to get a Consumer Reports “Best Buy” rating. Of course, it doesn’t need to, does it?) [Consumer Reports, October 16]

In just three states, more people have had their health insurance cancelled because of Obamacare regulations than have signed up for Obamacare on the exchanges in all 50 states combined. [Forbes, October 24]

As of noon on Thursday, stories about are the number one result for Google News searches for the terms “botched,” “crash,” “debacle,” “disaster,” “fiasco,” “foul-up,” and “mess.” Think about the things in the world that are a mess. is number one.

Posted on 10/25/13 02:35 PM by Alex Adrianson

Death Spiral Coming?

The fiasco of isn’t just a case of “Ha, ha, look at the government trying to run before it walks.” If visiting ends up being the online equivalent of going to the DMV, people aren’t going to go there to get health insurance—at least the ones who don’t really need it very much. The people who are healthy will just opt to pay the fine. As many have already noted, the individual mandate fines are already too low to change people’s behavior. David Hogberg, for example, has calculated that over 3 million young people would save $1,000 per year by paying the fine instead of buying a bronze plan from the exchanges. [“Why the ‘Young Invincibles’ Won’t Participate in the Obamacare Exchanges and Why It Matters,” by David Hogberg, National Center for Public Policy Research, August 2013]

Adding substantial time/hassle costs will only drive more young healthy people away from the exchanges. On top of that difficulty is the fact that the Internal Revenue Service might not even be able to collect the mandate penalty. As John Hinderaker points out, “the only way the IRS can possibly collect the penalty is by withholding your tax refund.” He notes, quoting the Joint Tax Committee:

The penalty is assessed through the Code and accounted for as an additional amount of Federal tax owed. However, it is not subject to the enforcement provisions of subtitle F of the Code. The use of liens and seizures otherwise authorized for collection of taxes does not apply to the collection of this penalty. Non-compliance with the personal responsibility requirement to have health coverage is not subject to criminal or civil penalties under the Code and interest does not accrue for failure to pay such assessments in a timely manner. [Powerline, October 23]

Remember, the point of the individual mandate was to prevent the health insurance death spiral: When health insurers by law have to charge everyone similar rates, the only way to keep low-risk people into the pool is to force them to buy health insurance. You can’t subsidize the high-risk with the low-risk when the only people in the pool are the high-risk. As John Goodman notes, even before this latest snafu, adverse selection was already built into the system:

On January 1, 2014, the state of Texas will formally end its risk pool and the 23,000 people who are enrolled there are expected to seek insurance in the Texas (ObamaCare) exchange instead. It will be a good deal for the state, which has been spending more than $12,000 per enrollee operating the pool. Other states will follow suit. So will the ObamaCare risk pools — some run by state governments and some run by the federal government — which currently insure about 107,000 people.

Then there are city governments throughout the land that have promised post-retirement health care benefits to retirees who are not yet eligible for Medicare. This is the age group that is the most expensive to cover. Under health reform, not only are there federal subsidies in the exchanges, the law limits the premiums charged to no more than three times the premium charged to enrollees in their twenties (although the actual cost of coverage is more on the order of six to one). Detroit, for example, is trying to send 8,000 city retirees to the Michigan exchange.

Similar efforts are expected in the private sector. According to a Towers Watson survey, more than half of employers that offer health care benefits to pre-65-year-old and post-65-year-old retirees plan to discontinue them.

Then there are those currently trapped in jobs they would like to leave but don’t because their health condition would cause them to pay very high premiums or perhaps be denied insurance altogether. [John Goodman’s Health Policy Blog, October 21]

It’s still early days for Obamacare, but right now the numbers aren’t adding up. As Josh Archambeault calculates, because of Obamacare regulations, more people have lost health insurance in just three states than have signed up for Obamacare on the exchanges in all 50 states combined. [Forbes, October 24]

Posted on 10/25/13 11:41 AM by Alex Adrianson

Almost Everywhere, Health Insurance Premiums Will Go Up

Maybe you’re looking forward to when works out its bugs, so you can find out how much you’ll save by buying health insurance from the federal exchanges. But you don’t need to wait. Drew Gonshorowski’s recent paper will give you an idea. According to the information available right now, you’re probably not going to pay less.

Gonshorowski estimates average premiums for plans that had been available in the non-group health insurance market and for plans that will become available through the ObamaCare exchanges and then compares the two. He estimates these premiums for adults age 27, adults age 50, and families of four in each state (except Massachusetts and Hawaii for which the data needed for the analysis are unavailable) and the District of Columbia. He finds the new Obamacare premiums will be higher than the old premiums in all jurisdictions except five. States such as New York will likely see decreases, explains Gonshorowski, because New York already had an over-regulated health insurance market.

The biggest increases for young adults (age 27) are in Arizona (157 percent), Arkansas (171 percent), Georgia (168 percent), Kansas (129 percent), Vermont (144 percent), and Virginia (253 percent). Also, in most states, the increases for young adults are bigger than the increases for adults age 50. That shouldn’t be surprising: ObamaCare’s regulations by design limit variability in premiums in order to create cross-subsidies from the young to the old. [“How Will You Fare in the Obamacare Exchanges,” by Drew Gonshorowski, The Heritage Foundation, October 16]

Find out how Obamacare will affect you, by checking the table below.[Click on the table to see a bigger version.]

For a less formal look at how health insurance premiums are changing, check out David Hogberg’s “Fun With Obamacare Exchanges” series at Amy Ridenour’s National Center Blog. So far he’s got posts on exchanges in Oregon, California, the District of Columbia [Part 2], Colorado, Idaho, Connecticut, as well as a post on the Federal exchange [Part 2].

Posted on 10/22/13 09:35 PM by Alex Adrianson

The Problem with Is Policy and Politics, Not Just Software

One of the major reasons isn’t working appears to be that the Obama administration didn’t want people to know the real cost of the health insurance they were buying. As critics have been noting for months, mandating that people buy health insurance that covers more things than the plans they have been buying with their own money means they will be buying pricier insurance. As Avik Roy reports, the Obama administration wanted to make sure people saw only the discounted prices they would pay after any subsidies for which they were eligible were applied:

“ was initially going to include an option to browse before registering,” report Christopher Weaver and Louise Radnofsky in the Wall Street Journal. “But that tool was delayed, people familiar with the situation said.” Why was it delayed? “An HHS spokeswoman said the agency wanted to ensure that users were aware of their eligibility for subsidies that could help pay for coverage, before they started seeing the prices of policies.” (Emphasis added.) […]

The federal government’s decision to force people to apply before shopping, Weaver and Radnofsky write, “proved crucial because, before users can begin shopping for coverage, they must cross a busy digital junction in which data are swapped among separate computer systems built or run by contractors including CGI Group Inc., the developer, Quality Software Services Inc., a UnitedHealth Group Inc. unit; and credit-checker Experian PLC. If any part of the web of systems fails to work properly, it could lead to a traffic jam blocking most users from the marketplace.”

Not only that, the Obama administration had plenty of warning that was going to be a disaster, but appears to have been determined to avoid delaying the launch because it didn’t want to give Republican critics any ammunition:

“We foresee a train wreck,” said another executive in a February interview with the Times. “We don’t have the IT specifications. The level of angst in health plans is growing by leaps and bounds. The political people in the administration do not understand how far behind they are.” Richard Foster, the former chief actuary at the Centers for Medicare and Medicaid Services, said last week that “so much testing of the new system was so far behind schedule, I was not confident it would work well.”

Henry Chao, the deputy chief information officer at CMS who made the “third world experience” comment, was told by his superiors that failure to meet the October 1 launch deadline “was not an option,” according to the Times. [Forbes, October 14]

Worrying about the politics has made the situation even worse, health care industry consultant Robert Laszewski tells Ezra Klein:

They were paranoid because Obamacare was under siege. I understand that. If they were open with their partners there would’ve been criticism, but it would’ve been constructive criticism. None of us had any idea that the government Web site would require security sign-ins before browsing. Why did that have to be a secret? No one will read a newspaper article about that. If it had been transparent I think most of this would’ve been caught upfront. That really hurt them. […]

The problem with the Obama administration keeping this open is its five times harder to fix something like this on the run. If it would’ve taken a month to fix it during the shutdown, it’ll take three or four or five months to fix it while it was running. [Washington Post, October 15]

Posted on 10/16/13 04:36 PM by Alex Adrianson

To Do: Find Out How ObamaCare Will Affect Your Health Insurance Premiums

Find out how Obamacare will affect health insurance rates across the country. Heritage Foundation analyst Drew Gonshorowski will reveal the findings of his new study at a panel discussion at Heritage. The discussion begins at 10 a.m. on October 16.

• If you’ve found out how Obamacare will affect your own insurance premiums and would like to share the information, then please let The Heritage Foundation know. Take a picture, as George Schwab did (featured in Friday’s Heritage Morning Bell) and send it to, or post it on The Heritage Foundation Facebook page, or tweet it to @Heritage and with the hashtag #ObamaHikes, or post it on Instagram with the hashtag #ObamaHikes.

Learn how economic freedom helps people from around the world build better lives for themselves and their communities. The Cato Institute will host a screening of Economic Freedom in Action: Changing Lives. The film is based on the Fraser Institute’s annual Economic Freedom of the World report. Discussion will follow featuring Michael Walker of the Fraser Institute and Johan Norberg of the Cato Institute. The screening starts at 4 p.m. on October 16.

Examine the case for a U.S. nuclear arsenal based on the concept of minimum deterrence. Douglas Feith, Ambassador Robert Joseph, and Keith Payne will be among the panelists at a Hudson Institute discussion. The event begins at noon on October 16.

Hear Rep. Rob Bishop (R-Utah) discuss the National Park Service’s shuttering of open-air, previously unfenced spaces around America’s national monuments—supposedly an activity that’s now essential because the Park Service has no authority to spend money. Bishop’s talk begins at noon on October 15 at The Heritage Foundation.

• For those in the nation’s capital, greet an Honor Flight when it arrives at the airport. The program to bring World War II veterans to Washington, D.C., to see the World War II Memorial is continuing, despite the government shutdown. A lot of folks come out to greet the veterans at the gate when they arrive at Reagan National Airport. If you want to do that, too, you’ll need to request a gate pass by e-mailing A schedule of Honor Flights arriving at Reagan National Airport is available online. Volunteers are also welcome to greet veterans at the memorials, too.

Discover the seven principles of sound public policy. Lawrence Reed, President of the Foundation for Economic Education, will talk about the principles during a discussion hosted by the Illinois Public Policy Institute. Reed’s talk begins at 6 p.m. on October 17 at the Illinois Policy Institute in Chicago.

Help the Oklahoma Council of Public Affairs celebrate 20 years of working for free markets. OCPA will hold its 2013 Liberty Gala on October 17 at the Tulsa Hyatt Regency. President George W. Bush will address the diners. The reception begins at 5:45 p.m.

Posted on 10/11/13 10:53 PM by Alex Adrianson

Is Your State’s Tax System Competitive?

Which states have tax systems that enhance (or harm the least) the business environment? According to the Tax Foundation’s 2014 State Business Tax Climate Index, the 10 best states are Wyoming, South Dakota, Nevada, Alaska, Florida, Washington, Montana, New Hampshire, Utah, and Indiana while the 10 worst are Maryland, Connecticut, Wisconsin, North Carolina, Vermont, Rhode Island, Minnesota, California, New Jersey, and New York.

Posted on 10/11/13 08:42 PM by Alex Adrianson

Some Governments Truly Are Shutdown

For example:

Posted on 10/11/13 03:55 PM by Alex Adrianson

Video of the Week: Environmental Exaggeration Makes People Poorer

Excessive risk avoidance doesn’t help the environment, either, explains Ivo Vegter, in this recent TEDx talk:

Posted on 10/11/13 02:17 PM by Alex Adrianson

Government Shutdowns Used to Be Common

Contrary to President Obama and his supporters, it’s not unusual at all for policy choices to get mixed up in bills that fund the government. From Dylan Matthews’s shutdown rundown, we learn that between 1981 and 1990, when Democrats controlled Congress (mostly) and Republicans were in the White House, there were nine government shutdowns. Those shutdowns happened because Congress and the President couldn’t agree on major policy issues such as supporting the Nicaraguan Contras, foreign aid for Syria and El Salvador, the Fairness Doctrine, the MX missile, and welfare expansions. Also, the issue of abortion figured prominently in five shutdowns when Democrats controlled Congress and another Democrat, Jimmy Carter, was in the White House. [Washington Post, September 25]

Posted on 10/10/13 07:00 PM by Alex Adrianson

Cherry-Picking the Government You Like Is the How You Stop the Government You Don’t Like

The President and his allies keep telling people that using a funding bill to change Obamacare is out-of-bounds. But this crowd has also said that changing Obamacare without passing any bill at all is A-OK. According to the Congressional Research Service, the President has changed Obamacare five times on his own, including delaying the mandate on employers to provide qualifying health insurance. (He’s also signed 14 bills that amend the law, for a total of 19 changes since Obamacare became law.) [Washington Times, September 11] 

In a letter sent to his Republican colleagues on August 21, Rep. Mark Meadows (R-N.C.) quotes a Founding Father approving of the House of Representatives tying policy changes to funding decisions. The full quote comes from Federalist 58, written by James Madison and published February 20, 1788:

The House of Representatives cannot only refuse, but they alone can propose, the supplies requisite for the support of government. They, in a word, hold the purse that powerful instrument by which we behold, in the history of the British Constitution, an infant and humble representation of the people gradually enlarging the sphere of its activity and importance, and finally reducing, as far as it seems to have wished, all the overgrown prerogatives of the other branches of the government. This power over the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure.

Now comes the Washington Post with an article by Valerie Strauss titled: Stop Blaming James Madison for the Shutdown.” Since the word “shutdown” appears nowhere in either Madison’s Federalist 58 or Meadow’s missive, we’d have to agree. But here is University of Virginia professor J.C.A. Stagg, the article’s only source:

Rep. Meadows’s quote is also correct — but again only so far as it goes. None of the Founders doubted that the power of the purse could be an ultimate sanction in the hands of the House, though it would be impossible to prove that their understanding of this would have extended to the point of shutting down the entire government as opposed to refusing appropriations for particular policies.

Prof. Stagg is an authority on Madison, but he’s no authority on the last few weeks. To recap: Since September 20, the House of Representatives has passed at least a dozen bills to fund various parts of the government. That includes one bill that preserved funding for ObamaCare but made some changes to the program such as delaying the individual mandate and repealing the medical device tax. The Senate either amended and then refused to go to conference on the bills, or ignored them. The President said he would veto partial funding bills. [ABC News, October 9]

Senate Majority Leader Harry Reid explained: “Why would we want to have the House of Representatives, John Boehner, cherry-pick what stays open and what should be closed?”

As a matter of logic, the House cannot simultaneously cherry-pick what government it wants to remain open while also shutting it down entirely. It’s the Senate and the President who want the budget to be an all-or-nothing choice in order to get one particular policy they want. If Strauss’s article was meant to be a debunking, it failed.

Posted on 10/09/13 06:20 PM by Alex Adrianson

Canada Is Still Beating the United States

For the eighth year running, the United States has less economic freedom than Canada, according to the Fraser Institute’s latest Economic Freedom of the World Report. Jared Meyer notes some of the reasons for the gap:

Canada has a federal corporate tax rate of just 15 percent whereas the United States has a top rate of 35 percent, the highest among OECD countries. Canada’s federal debt-to-GDP ratio is 35 percent. It is targeting a ratio of 25 percent by 2021 thanks to a strong commitment to spending cuts from Conservative Party Prime Minister Stephen Harper. The U.S. ratio is 73 percent and rising. Mr. Harper has publicly pushed for approval of the Keystone XL Pipeline, which would benefit the economies of both countries, while President Obama has done all he can to block the State Department’s permit. Canada also has an unemployment rate of 7.1 percent, lower than America’s.

From 1980 until 2000 the United States was generally rated the third freest country behind only Hong Kong and Singapore. Now it is #17. It is not only developed countries, such as New Zealand (#3), Switzerland (#4), and Finland (#7), overtaking the United States—developing countries are catching up. America’s ranking fell 10.5 percent from 2000 to 2011. Over that same period the world’s economic freedom rose by two percent. This is not a good sign for the future of America in an age of global competition.

U.S. rankings fell from the previous year in every category. According to Fred McMahon of the Fraser Institute, a co-author of the Index with Robert Lawson and Joshua Hall, the main factors that brought down America’s scores were overspending, weakened rule of law, and regulatory overkill.

If the United States continues to lag in economic freedom, its standard of living will also fall below those of the more economically free countries: “Those people living in the freest quartile of countries produce a GDP per capita that is on average eight times larger than those in the least free quartile. They produce two times as much per capita as those in the second freest quartile.” [Economics 21, October 9]

Posted on 10/08/13 06:25 PM by Alex Adrianson

What’s Gone Wrong with

Wall Street Journal:

Information technology experts who examined the website at the request of The Wall Street Journal said the site appeared to be built on a sloppy software foundation. Such a hastily constructed website may not have been able to withstand the online demand last week, they said.

Engineers at Web-hosting company Media Temple Inc. found a glut of stray software code that served no purpose they could identify. They also said basic Web-efficiency techniques weren’t used, such as saving parts of the website that change infrequently so they can be loaded more quickly. Those factors clog the website’s plumbing, Media Temple said.

The identity-checking foul-ups are also triggering problems for state-run exchanges, which rely on the federal system. The problem caused delays last week for users of MNsure, Minnesota’s exchange, as they waited for federal confirmation to create their accounts, said April Todd-Malmlov, MNsure’s executive director. She said the issue in her state was largely resolved by Friday. [Wall Street Journal, October 6]

One of the problems that surfaced this week, reports Sean Gallagher, is that “individuals whose logins never made it to the site’s database will have to re-register using a different username, as their previously chosen names are now stuck in authentication limbo.” Also: “[C]hanges made to profiles already within the system may not be saved either—a problem that is only indicated by a very non-descriptive error message.” [Ars Technica, October 8]

Remember, Obamacare requires you to enroll in the exchanges or pay a fine if you don’t receive qualifying health insurance from your employer. But enrollment hasn’t taken off yet, reports David Martosko:

Just 51,000 people completed Obamacare applications during the first week the website was online, according to two sources inside the Department of Health and Human Services who gave MailOnline an exclusive look at the earliest enrollment numbers. […]

The open enrollment period for Obamacare coverage is slated to last for six months. If the first week’s total were an indication of how many Americans will sign up during that time through the Obama administration’s website, its final tally would reach a paltry 1.32 million. […]

If the state-run exchanges were to have a similar response rate for six months, the national enrollment total would be approximately 2 million.

That number is less than 29 per cent of the 7 million the Obama administration would need, according to the nonpartisan Congressional Budget Office, in order to balance the new health insurance system’s books and keep it from financial collapse. [Daily Mail, October 10]

Democrats shut down the government in order to make sure this mess launched on time.

Posted on 10/08/13 01:26 PM by Alex Adrianson

The Federal Government Is Shut Down, Which Means It’s Busier Than Ever Finding Ways to Annoy You

“If you loved this country, you would not be closing it down,” said Rep. David Scott (D-Ga.) last week. Scott was blaming Republicans for the government shutdown. As David Boaz points out, however, Scott was confused: The government and the country are not the same thing; Congress can’t shut down the country merely by failing to fund the government. [Cato Institute, October 3]

It turns out, however, that a shutdown government can be awfully pushy. As many news stories reported last week, the administration’s idea of shutting down means doing things the government doesn’t normally do, like putting up barricades to otherwise fenceless open-air spaces, telling people to leave privately-run establishments that sit on federal land but require no federal resources to operate, and creating “website not available” redirect pages instead of just leaving static content up on federal websites. The stories about Park Service bullying keep coming from around the country:

• The Park Service told Joyce Spencer, 77, and Ralph Spencer, 80, they had to leave their house on Lake Mead National Recreation Area in Nevada. The Spencers own the house, but not the land. [KTNV, October 4]

• The Park Service told private boat operators that they could not operate their own boats launching from their own docks on the St. Croix River, which is designated a National Scenic Riverway. “[P]roviding visitor services within the riverway during a government shutdown is a breach of your (permit), and noncompliance with the shutdown could result in permits not being renewed during the next two-year cycle,” said the Park Service in a letter to boat operators. [, October 3]

• The Park Service issued a notice forbidding charter boats, tour boats, fishing boats, and paddling boats from going out onto the Florida Bay—i.e., 1,100 square miles of ocean. [Miami Herald, October 3]

The Park Service closed the Great Smoky Mountains National Park, including the Foothills Parkway in Tennessee. That closure left some residents in Eastern Tennessee with few good options for getting around: “The closure caught locals by surprise and left the school district scrambling to alert parents that they would need to find a way to get their kids back home. And until the partial government shutdown ends, school buses will not run. That means parents will have to transport their children to and from school using treacherous ‘white knuckle routes.’” [Fox News, October 7]

• Armed park rangers issued John Bell a $100 ticket for taking a jog in Valley Forge National Historic Park. Bell saw a sign announcing the park’s closure, but he also saw other joggers and bikers. Also, there was no barrier blocking entrance to the park, so he figured the sign was meant for vehicles. He was wrong. Rangers were waiting to give him a ticket when he exited the park. [Fox News, October 8]

• A bus carrying senior citizens through Yellowstone National Park stopped briefly when a herd of bison passed by. The tourists got out to take pictures and were immediately confronted by armed Park Rangers who told them that taking pictures was recreating, which they could not do. Later, when the seniors—some from Japan, Australia, and Canada—were sent out of the park on a two-and-a-half-hour ride, they were told the bus could not stop for bathroom breaks. [Eagle Tribune, October 8]

• Volunteer Chris Cox of South Carolina spent a number of days mowing the grass and picking up trash on the National Mall because he thought veterans visiting the war memorial shouldn’t have to trip over banana peels. When Park Police eventually told him to leave, Cox said: “I’m not here trying to make headlines. I’m here trying to prevent headlines.” The officer replied: “Well, maybe there should be a picture of the trash cans overflowing in the newspaper. Maybe that would help us.” [Daily Mail, October 9]

Mark Steyn explains the point of these harassments: “[T]he thug usurpers of the bureaucracy want to send a message: In today’s America, everything is the gift of the government, and exists only at the government’s pleasure, whether it’s your health insurance, your religious liberty, or the monument to your fallen comrades.” [National Review, October 4]

[See also: “The List: Unnecessarily Shut Down by Obama to Inflict Public Pain,” by John Nolte,, October 5.]

Posted on 10/07/13 05:43 PM by Alex Adrianson

To Do: Learn the Truth About Gun Control

• Check out the new film, Assaulted: Civil Rights Under Fire, which explores the racial and class biases of gun control proponents and shows how those biases still operate. The film is narrated by rapper and actor Ice-T. You can catch a special screening of film at 7 p.m., October 8, at the Muenzinger Auditorium at the University of Colorado-Boulder. The screening will be followed by a Q&A session featuring Second Amendment scholar and Independence Institute research director David Kopel.  

• If you’re in the D.C./Northern Virginia area you might consider visiting George Washington’s Mount Vernon—since it’s open! It’s unaffected (mostly) by the government shutdown, because it is funded entirely by private money. It also happens to be one of the best of the presidential historical sites.

• Get ready for the Values Voter Summit, which will be held October 11-13 at the Omni Shoreham Hotel in Washington, D.C. This year’s theme: “Standing for Faith, Family and Opportunity for All.” Among the confirmed speakers: Ryan Anderson, Star Parker, Sen. Rand Paul, and Cal Thomas.

Learn how GMO labeling laws spread consumer misinformation. The Heritage Foundation will host a discussion with Gregory Conko of the Competitive Enterprise Institute, L. Val Giddings of the Information Technology & Innovation Foundation, and Julie Gunlock of the Independent Women’s Forum. The discussion begins at noon on October 8.

• See a movie about a real-life American hero. Captain Phillips, starring Tom Hanks, chronicles the 2009 hijacking of the Maersk Alabama by Somali pirates and the ensuing standoff in which Captain Richard Phillips was taken hostage aboard a lifeboat. The film opens nationwide October 11.

• Help honor Vaclav Klaus, former President of the Czech Republic who helped guide his country from Communism to freedom. The Victims of Communism Memorial Foundation will award Klaus its Truman-Reagan Freedom Medal at a ceremony at the George Town Club in Washington, D.C. on October 8. The ceremony begins at 8 p.m. with a reception to follow. For more info or to RSVP, email

Posted on 10/05/13 12:32 AM by Alex Adrianson

September 30 Was a Good Day in the Courts for Free Speech, Thanks to the Institute for Justice

The libertarian public interest law firm won two decisions striking down campaign finance regulations in both Mississippi and Arizona that prevented ordinary citizens from speaking out on politics:

In the Mississippi case, Justice v. Hosemann, Judge Sharion Aycock of the U.S. District Court for the Northern District of Mississippi ruled that Mississippi’s campaign finance scheme was an unconstitutional burden on small groups and individuals.  Mississippi’s restrictions applied to any individual or group that spent more than $200 to talk about an initiative to amend Mississippi’s Constitution.  The law was challenged by five friends from Oxford, Miss.—Vance Justice, Sharon Bynum, Matt Johnson, Alison Kinnaman and Stan O’Dell—who simply wanted to join together and speak out in favor of then-Initiative 31—an effort that would provide Mississippi citizens with greater protection from eminent domain abuse.  But Mississippi’s $200 threshold is so low that it was impossible for them to even run a single quarter-page ad in their local newspaper without having to become a political committee. 

Judge Aycock found that Mississippi’s campaign finance requirements were so complicated that “a prudent person might have extraordinary difficulty merely determining what is required” and that “potential speakers might well require legal counsel to determine which regulations even apply, above and beyond how to comport with those requirements.” 


In the Arizona case, Galassini v. Town of Fountain Hills, Judge James A. Teilborg of the U.S. District Court for the District of Arizona struck down Arizona’s similar regulatory scheme.  The Arizona laws had been challenged by Dina Galassini, a resident of Fountain Hills, Ariz., who in 2011 sent an email to 23 friends and neighbors, inviting them to join her in a protest against a $44 million road bond by making homemade signs and joining her on a street corner.  “Little did she realize,” as Judge Teilborg noted, “that she was about to feel the heavy hand of government regulation in a way she never imagined.” 

Almost immediately she received a letter from the town clerk telling her to stop speaking until she had registered with the town as a “political committee” under Arizona’s campaign finance laws.  Represented by IJ, Galassini challenged the Arizona law, securing an injunction that allowed her to hold her street-corner protests.

Galassini said, “I was stunned to learn that I needed to register with the government just to talk to people in my community about a political issue.  All I could think was, ‘How can this be allowed under the First Amendment?’” 

Now Judge Teilborg has granted Galassini a final victory, declaring that Arizona’s definition of “political committee,” under which she was regulated, is vague, overbroad, and unduly burdensome. [Institute for Justice, October 1]

Posted on 10/04/13 11:03 PM by Alex Adrianson

Happy 100, Federal Income Tax!

My how you’ve grown! From Dan Mitchell, here are some snapshots of your younger years, starting in 1913:

The top tax rate was only 7 percent, the tax form was only 2 pages, and the entire tax code was only 400 pages. And a big chunk of the revenue actually was used to lower the tax burden on international trade (the basic tariff rate dropped form 40 percent to 25 percent).

But just as tiny acorns become large oak trees, small taxes become big taxes and simple tax codes become complex monstrosities. And that’s exactly what happened in the United States.

We now have a top tax rate of 39.6 percent, and it’s actually much higher than that when you include the impact of other taxes, as well as the pervasive double taxation of saving and investment.

And the relatively simply tax law of 1913 has metastasized into 74,000 pages of Byzantine complexity. [Cato Institute, October 3]

Posted on 10/04/13 10:35 PM by Alex Adrianson

It Might Be that a Lot of Inessential Government Really Is Inessential

The political prognosticators say the 1995/1996 government shutdowns show that budgetary impasses are a bad idea, but the economics, says Tim Cavanaugh, tell a different story:

Despite the greatly ballyhooed furloughs of government employees, unemployment stayed even at 5.6 percent during November 1995, the period of the first spending gap, which ended when a deal cut by President Bill Clinton and Republican legislators allowed government to stay funded at 75 percent.

Unemployment actually dropped to 5.5 percent during the second spending gap, which was more complete than the first.

Unemployment continued to plummet in the months following the shutdown, as a hamstrung Clinton allowed the rate of government spending increases to slow and headed toward the eventual budget surpluses that became the highlight of Clinton’s legacy. According to the Bureau of Labor Statistics, unemployment dropped half a percentage point within a year of the first shutdown and had dipped below five percent by the spring of 1997.

More surprisingly, gross domestic product increased during both quarters covered by the Clinton-era shutdowns. According to the Bureau of Economic Analysis, GDP began the fourth quarter of 1995 at $7.7 trillion and ended the second quarter of 1996 at $7.9 trillion. By the end of the second quarter 1996 GDP had topped $8 trillion.

Personal consumption expenditures, gross private domestic investment and personal income also increased during and immediately after the shutdown.

The GDP numbers are particularly striking because government spending is given outsized weight in GDP measures, which assume that every dollar in federal spending results in a full dollar’s worth of economic activity. Nevertheless, GDP continued to climb despite the suspension of transfer payments. [Daily Caller, September 29]

Posted on 10/04/13 10:17 PM by Alex Adrianson

A Glitchy MacGuffin

This week Democrats in the Senate shut down the federal government in order to keep Obamacare open. But Obamacare is not exactly open in the way that its supporters were hoping:

The Borinquen Health Center in Florida said only about 5 percent of the nearly 400 people who sought guidance in a 48-hour period were able to access, the website portal for consumers in 36 states where the federal government is operating exchanges, also known as marketplaces. [Insurance Journal, October 4]

Even MSNBC had trouble:

But beyond the software glitches is an even bigger problem with the online portals. John McAfee, a pioneer in anti-computer virus software, told Neil Cavuto on Wednesday:

There is no central place where I can go and say, “OK, here are all the legitimate brokers, the examiners for all of the states” and pick and choose one.

Instead, any hacker can put a website up, make it look extremely competitive, and because of the nature of the system—and this is health care, after all—they can ask you the most intimate questions, and you’re freely going to answer them. What’s my Social Security number? My birth date? What are my health issues? […]

It’s not something software can solve. I mean, what idiot put this system out there and did not create a central depository? There should be one website, run by the government, you go to that website and then you can click on all of the agencies. This is insane. […] [Y]ou can imagine some retired lady in Utah, who has $75,000 dollars in the bank, saving her whole life, having it wiped out in one day because she signed up for Obamacare. And believe me, this is going to happen millions of times. This is a hacker’s wet dream. I mean I cannot believe that they did this.

Posted on 10/04/13 10:04 PM by Alex Adrianson

On the Front Lines

Last week we enjoyed seeing the State Policy Network hand out three deserving awards at its annual meeting in Oklahoma City.

Fighting for worker rights in Michigan: Joseph Lehman, President of the Mackinac Center, won the Roe Award, which is given every year to a leader “in the state public policy movement whose achievements have greatly advanced the free market philosophy.” The award is named after Thomas A. Roe Jr., founder of the State Policy Network. Lehman first worked for the Mackinac Center in 1995, and became President in 2008.

The Center achieved its biggest victory last December when Michigan lawmakers passed right-to-work legislation, which says joining a union can’t be made a condition of employment. The Center had been working for that policy since 1994. Lehman said: “The Roe Award created an occasion to focus attention on the Mackinac Center’s influence on better policies for Michigan, such as freedom to work. I accept the award on behalf of our team and dedicate it to them.” [Mackinac Center, September 30]

The Center has also been at the forefront of fighting the involuntary unionization of home health care and home daycare workers. We interviewed Lehman about those battles and more for our Winter 2013 issue of The Insider.

Promoting liberty in North Carolina: The John William Pope Foundation and the North Carolina-based think tanks the John Locke Foundation, the Civitas Institute, the N.C. Institute for Constitutional Law, the John William Pope Center for Higher Education Policy, and the N.C. Education Alliance won SPN’s Network Award. The Network award recognizes the accomplishments of state-based organizations promoting free enterprise. These six organizations won the award for their close work together on a variety of issues in North Carolina, from taxes, to corruption, to education. [John William Pope Foundation, October 2]

Fighting backdoor unionization in Minnesota: Jennifer Parrish, an in-home child care provider in Rochester, Minn., won the Unsung Hero Award (sponsored by the Vernon K. Krieble Foundation). In 2005, Parrish became active in fighting efforts to unionize home child care workers when a union organizer come to her house and used bullying tactics and deceptive claims to get her to sign a petition for unionization. Eventually, Parrish become a leader in the anti-unionization movement—all on her own time and using her own resources. [, September 27]

Posted on 10/04/13 08:57 PM by Alex Adrianson

In Case This Week Hasn’t Provided Enough Liberal Media Bias, Check Out the Highlights from Last Year

Last week we were in Oklahoma City for the State Policy Network Annual Meeting, but if we hadn’t been there, we’d surely have been at the annual Media Research Center Gala, featuring the Dishonors Awards. The event is always a hoot for recognizing the worst and the dimmest media personalities of the year for their liberal bias. We’ll point to one highlight: With a quote that you probably remember, Melissa Harris-Perry won the Dan Rather Memorial Award for Stupidest Analysis:

We have never invested as much in public education as we should have, because we’ve always had kind of a private notion of children. Your kid is yours, and totally your responsibility. We haven’t had a very collective notion of these are our children. So, part of it is we have to break through our kind of private idea that kids belong to their parents, or kids belong to their families, and recognize that kids belong to whole communities. Once it’s everybody’s responsibility, and not just the household’s, then we start making better investments.

Charles Krauthammer won an award of a different sort: the 7th Annual William F. Buckley Jr. Award for Media Excellence. You can see all the fun in the video below:

Posted on 10/04/13 03:39 PM by Alex Adrianson

Somebody Was Worried the Shutdown Might Not Hurt Enough

The tactic of government officials impairing the most highly visible and valuable services in order to make funding cuts really hurt is so well known that it has a name and even a Wikipedia entry: The Washington Monument Syndrome. That means us rubes just might look it up and realize what’s going on this week during the government shutdown—or, as Fox News more appropriately calls it, “government slimdown.”

In theory, a total lapse in funding shouldn’t be an opportunity for bureaucratic game playing: Services are either essential and remain functioning as per the Anti-Deficiency Act, or they are closed. But under the Obama administration, shutdown means finding ways to turn off things that don’t have an off switch or don’t require work to maintain. A few examples:

The National Mall: The Obama administration’s Office of Management and Budget instructed the National Park Service to put up barriers to the monuments on the National Mall. That included the World War II Memorial (funded mostly by private money, by the way). On Tuesday, a group of World War II veterans arrived to visit the memorial as part of the Honor Flight program. The barriers carried the message “Because of the Federal Government SHUTDOWN, All National Parks Are CLOSED,” but someone moved the barriers aside, letting World War II veterans visit the World War II Memorial.

The group had appealed for help arranging its visit directly to the White House, but was turned down. [Daily Caller, October 1] The Park Service also told one Honor Flight group that was planning a Friday visit that its members faced arrest if they tried to enter the closed monument. [, October 1]

On Wednesday, as Paul Bedard notes, more federal employees were sent to re-fortify the barricade at the World War II Memorial than were detailed to stop Islamic terrorists attacking U.S. embassy personnel in Benghazi, Libya. [Washington Examiner, October 2] Later on Wednesday, the Park Service announced that the World War II Memorial would be opened—but for veterans only!

Park Service Police are still on duty because they are deemed essential employees. They are essential, we gather, for telling citizens to leave open-air spaces that are not normally patrolled. That’s how shut down this government is!

Claude Moore Colonial Farm: The Park Service also shut down Claude Moore Colonial Farm in McLean, Va., even though it is entirely funded by a private non-profit organization. The Park Service says it has to shut down the site because it sits on federal land. However, Anna Eberly, Managing Director of Claude Moore Colonial Farms, told supporters by email that the Farm had never been closed down during previous budget impasses. Eberly continued: “You do have to wonder about the wisdom of an organization that would use staff they don't have the money to pay to evict visitors from a park site that operates without costing them any money.” [, October 2]

Bus Turnaround Lane at George Washington’s Mount Vernon. George Washington’s Mount Vernon is also operated by a private foundation, and the Park Service can’t close it down because it doesn’t own the land either. But the service still did what it could to make itself a nuisance by putting up barriers to the bus turnaround lane just outside the site. The bus turnaround lane is on land owned by the Park Service. Check out the photo posted by Newt Gingrich:

Government Websites. A number of government websites are carrying the message: “Due to a lapse of federal government funding, this website is unavailable. We sincerely regret this inconvenience.” But if you go to a government page and get that message, then you’re still on the government page. Nobody turned anything off; they just changed the content. Does that make sense? Julian Sanchzez says it’s possible but unlikely there is a security reason for walling off the regular content. He notes:

The main page at redirects to a page saying the site is unavailable, but lots of subdomains that, however cool, seem “inessential” remain up and running: the “Solar System Exploration” page at; the Climate Kids website at; and the large photo archive at, to name a few. There are any number of good reasons some of those subdomains might be hosted separately, and therefore unaffected by the shutdown—but it seems odd they can keep all of these running without additional expenditures, yet aren’t able to redirect to a co-located mirror of the landing page. 

Still weirder is the status of the Federal Trade Commission’s site. Browse to any of their pages and you’ll see, for a split second, the full content of the page you want—only to be redirected to a shutdown notice page also hosted at But that means… their servers are still up and running and actually serving all the same content. In fact they’re serving more content: first the real page, then the shutdown notice page. If you’re using Firefox or Chrome and don’t mind browsing in HTML-cluttered text, you can even use this link to navigate to the FTC site map and navigate from page to page in source-code view without triggering the redirect. [Cato Institute, October 1]

Bonus Shutdown Melodrama: FLOTUS’s fingers furloughed from tweeting:

Due to Congress’s failure to pass legislation to fund the government, updates to this account will be limited. #Shutdown
— FLOTUS (@FLOTUS) October 1, 2013

FLOTUS, of course, is the Twitter handle for First Lady Michelle Obama.

Posted on 10/03/13 06:47 PM by Alex Adrianson

Video of the Week: Another Fine Entry in Health and Human Services’ ObamaCare Video Contest

You know who takes no prisoners when it comes to ObamaCare? Remy:

Posted on 10/02/13 06:53 PM by Alex Adrianson

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