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InsiderOnline Blog: February 2010

Save the Oceans with More Drilling

Could more drilling for oil actually be the solution to an environmental problem? According to Bruce Allen and the group SOS California (Stop Oil Seeps California), the answer is yes. The group has a documentary on the problem of natural oil seepage, which, according to the Natural Resource Council, is a far bigger source of oil emissions into the ocean than man-made oil spills. Allen’s group contends that along with more drilling for oil would come more control over these natural seepages. Their film, which was screened this week at The Heritage Foundation, is called A Crude Reality. Opponents of more drilling should watch the film and give serious thought to its arguments. Here is the trailer:

Posted on 02/26/10 01:18 PM by Alex Adrianson

One Way That Becoming More Like Europe Would Be Good

President Obama’s plans to raise the top two income tax rates would make the United States a higher-taxing country than many in Europe, notes the Cato Institute’s Chris Edwards: “If the top federal rate rises to 40 percent next year, the United States will have the ninth highest top individual rate in the OECD, including state-level taxes. We’ve already got the second-highest corporate tax rate in the OECD.”

Posted on 02/26/10 12:45 PM by Alex Adrianson

Worth Checking Out: Get Your Web Site Off the Shelf, Master FOIA

• Are you building a Web site to promote liberty? Before you dump your donors’ hard-earned dollars into proprietary software, take a look at Ready Made Web. The site, launched recently by Cord Blomquist and Jerry Brito, is a virtual toolkit for using off-the-shelf technologies to create a Web site. Want to know about open source content management? How to incorporate social media into your Web site? Ready Made Web has articles that cover those topics—plus open-source success stories from around the liberty movement.

• For all you watchdogs, Judicial Watch has recently published a handbook on how to use the Freedom of Information Act to uncover vital information on what’s going on in government.

The Alternative Manifesto provides a 12-step program (or, “programme,” as they say in England) for curing Britain’s addiction to government spending. Author Eamonn Butler of the Adam Smith Institute interviewed the heads of Britain leading think tanks to produce a comprehensive plan for cutting government down to size. By the way, Butler, along with his colleague Madsen Pirie, have just been awarded the National Free Enterprise Award from the Institute of Economic Affairs. Congrats.

Bankrupting America is new Web site devoted to exploring the policies hindering economic opportunity and growth in America. Produced by the group Public Notice, the site will focus on the causes of the country’s current economic downturn and the future implications of careless policy-making.

• We reported last week that sales of Friedrich Hayek’s The Road to Serfdom have quadrupled since November 2008, reflecting, perhaps, some anxiousness about the current spasm of government interventions in economy. Indeed, Hayek scholar Bruce Caldwell will be at The Heritage Foundation this coming Wednesday to discuss how Hayek’s ideas are especially relevant for addressing today’s economic difficulties.

• As Lawrence Reed, president of the Foundation for Economic Education, points out, if you don’t take it upon yourself to help promote and defend liberty then you are essentially a free-rider on the work of those who do. There are lots of ways to help the cause of liberty. You can find some good ideas by checking Reed’s Daily Liberty Checklist.

Posted on 02/26/10 12:24 PM by Alex Adrianson

Torture and Death in Cuba

Dissidents in Cuba are predicting that the death of Orlanda Zapata Tamayo will galvanize the pro-democracy movement on the Communist-governed island. Tamayo, 42, had been imprisoned since 2003 because of his membership in groups calling for democracy in Cuba. He died Thursday while on a hunger strike protesting his treatment by prison authorities. Cuba Archive reports:

In early December, Zapata went on hunger strike to demand proper treatment. Prison authorities refused him water for 18 days, leading to kidney failure. He was then held naked over a powerful air conditioner and developed pneumonia. Earlier today [Thursday] and already in critical condition, he was admitted to Hermanos Ameijeiras hospital in Havana and began receiving fluids intravenously. He died hours later. The Cuban government never responded to his demands.

Posted on 02/26/10 12:42 AM by Alex Adrianson

Thanks, Unions

As of December 31, 2009, stimulus funds had paid for the weatherization of about 9,100 homes—about 583,900 less than had been planned. Aside from “Why is weatherizing private homes the government’s job?” you might wonder: “Why so few?” For that outcome, you can thank Congress and its determination to protect union privilege at all cost. States, counties, and municipalities can’t just go get the best price they can on weatherization—which would mean more work to spread around. No: Congress required that they pay prevailing (higher) wages (AKA Davis-Bacon requirements) so that unions are not undercut by cheap labor. That caused some unanticipated delays, reports the Government Accountability Office:

For example, the Department of Energy’s Weatherization Assistance Program became subject to the Davis-Bacon requirements for the first time after having been previously exempt from those requirements. Thus, the Department of Labor had to determine the prevailing wages for weatherization workers in each county in the United States, a task it completed on September 3, 2009. Seven out of 16 states and the District of Columbia that GAO has been reviewing said that they had waited to begin weatherizing homes until the Department of Labor had determined county-by-county prevailing wage rates for their state. States used only a small percentage of their available funds in 2009, mostly because state and local agencies needed time to develop the infrastructures required for managing the significant increase in weatherization funding and for ensuring compliance with Recovery Act requirements, including Davis-Bacon requirements. … In addition, officials from the Department of Housing and Urban Development told us that until passage of the Recovery Act, one of its grant programs had never been subject to Davis-Bacon requirements. Therefore, agency staff, grantees, and contractors needed to establish and implement new administrative procedures, which delayed the start of construction projects. Officials from 10 states and 3 local agencies said Davis-Bacon requirements had similarly caused delays in implementing Recovery Act projects.

Posted on 02/26/10 12:11 AM by Alex Adrianson

How to Put Law Back in Its Place

A big-picture talk from Philip K. Howard at the TED conference:

H/t: Overlawyered.

Posted on 02/25/10 10:44 PM by Alex Adrianson

Property Rights and Prosperity

Countries with the most robust protections of property rights, as indicated by their scores in the 2010 International Property Rights Index, have significantly higher per capita incomes than countries with weak property rights regimes.

The findings, just released this week by the Property Rights Alliance, are further demonstration of what many economists have long understood: that secure property rights are vital to economic growth. Why? People who fear their property may be expropriated tomorrow have little incentive to make investments that will create wealth in the future. And without legally enforceable titles to property, trading assets for mutual advantage is also much harder.

Specifically, the report finds that countries ranked in the top 20 percent by the IPRI had per capita incomes of $35,676, while the bottom 20 percent had per capita incomes of $4,437. The next lowest quintile also performs poorly, with per capita incomes of only $4,699.

The index shows Finland is the country with the strongest protections of property rights. The United States ranks only 15th, behind 12 European countries, Canada, and Singapore.

Posted on 02/24/10 12:59 PM by Alex Adrianson

The Failure of Anti-Money Laundering Laws

Anti-money laundering laws impose $7 billion to $10 billion of paperwork costs per year, reduce financial privacy for law-abiding American citizens, and don’t catch very many criminals. Time to reassess these laws, says Dan Mitchell:

Posted on 02/23/10 11:18 AM by Alex Adrianson

Premium Spikes: Regulators Did It

Anthem Blue Cross, WellPoint’s California subsidiary, has told 700,000 of its individual health insurance customers that their premiums will rise 39 percent. The President and other proponents of ObamaCare think this news helps make their case that insurance companies need to be reined in. They note in particular that WellPoint had a $2.7 billion profit in the last quarter of 2009.

But, points out the Wall Street Journal, Obamacare proponents are ignoring the role of regulations here. Anthem lost $58 million last year insuring Californians who elect to continue the coverage they had under a former employer. Anthem has no choice but to cover that population and to cover it under rates set by state regulators. Increasing premiums on individuals not covered by those regulations, says Heritage fellow Robert Book, is WellPoint’s attempt to stem the losses on its California business.

Further, says Book, we should expect the same price contortions on a national level if ObamaCare passes. Both the House and the Senate health care bills give bureaucrats even greater power than California regulators possess to determine benefit levels and control prices. And both bills prevent insurers from discriminating against sicker patients. Under that set-up, healthier individuals will forgo insurance until they get sick. And if the insurance pool gets sicker, then premiums must spike nationally if insurers are to remain in business under ObamaCare.

Posted on 02/22/10 06:04 PM by Alex Adrianson

Worth Checking Out: Do Liberals Know Best? Do the Feds Know Best?

• An event at the American Enterprise Institute will ask: “Do Liberals Know Best?” Providing an answer will be Gerard Alexander, delivering AEI’s March Bradley lecture on March 15 at 5:30 p.m.

• Thanks to the Pioneer Institute, city dwellers in Massaschusetts have a new online tool to track how their city government is performing and to compare 14 cities throughout the state. The institute’s Middle Cities Initiative focuses on economic development in the 14 cities that comprise the state’s historic industrial sector. As part of that initiative, Pioneer has launched MassCityStats, a Web site that provides users with numerous benchmarks of the cities’ performances, including crime rates, school dropout rates, foreclosure rates, bond ratings, city debt as a percentage of revenue, and many others.

• The Mackinac Center for Public Policy has launched a new online news source—Michigan Capital Confidential Daily—to fill the news gap left by the shuttering of newspapers around the state. Recent articles include an examination of why a state agency remains in operation months after the legislature voted to eliminate it, and a look at “green” education programs, which in at least one school means checking the pressure on school bus tires.

• From health care to tort reform to bailouts to protecting gun rights, the state of Texas is at the forefront of efforts push back against an overweening federal establishment. At The Heritage Foundation, Texas Attorney General Greg Abbot will discuss how states can resist federal encroachment. The event will begin at noon on March 1.

• The winner of the next Milton Friedman Prize will be honored by the Cato Institute at a black-tie event on March 13. The award, given every other year, honors individuals who have made a significant contribution to the advancement of human freedom. The 2008 winner was Yon Goicoechea, a leader of the pro-democracy student movement in Venezuela.

Posted on 02/19/10 02:16 PM by Alex Adrianson

Traditional Public Schools Are Not the Model of Inclusion Their Proponents Think

“Vouchers drain money from public schools so that some students can go to private schools.” Somewhere in the vicinity of that declarative sentence—which school choice critics regard as some sort of argument—lurks the thought that vouchers must equal special advantages for some students that are denied to others. Guess what? That’s what the system of public schools is. A new report from the Fordham Foundation has identified 2,817 public schools around the country that serve very few poor students. These “private public schools,” as the Fordham report calls them, are either elementary schools where students eligible for free or reduced-price lunches make up less than 5 percent of the school’s enrollment, or middle schools or high schools where fewer than 3 percent of students are reported to be poor. Nationwide, 44 percent of public school students are eligible for free or reduced-price lunches. In total, these “private public schools” serve 4 percent of all public school students.

These schools also tend to be racially segregated. Nationwide, 17 percent of primary school students are African-American and 21 percent are Hispanic. But in the 2,817 “private public schools” identified by Fordham, only 3 percent of students are African-American and only 12 percent are Hispanic. It’s not an accident that so many public schools end up with skewed demographics. As the authors of the report, Michael Petrilli and Janie Scull, point out, these schools are exclusionary in practice because of public policies that tend to sort people into neighborhoods according to their incomes. Remember, to attend a public school, a student must live within that school’s district boundaries.

It should be obvious that there is a public policy option that is ready-made to provide opportunities for children in poor neighborhoods to attend a better school: school choice. Those who want a more inclusive school system should support school choice. And they should ask the 2,817 “private public schools” identified by Fordham why they won’t accept poor kids with a scholarship—like truly private schools do.

See “America’s Private Public Schools,” by Michael J. Petrilli and Janie Scull, published by the Fordham Foundation, February 2010.

Posted on 02/19/10 11:46 AM by Alex Adrianson

Devaluing One’s Currency Is Not a Cunning Plan for Building Wealth

From Don Boudreaux, more brilliant debunking of economic nonsense:

When I was a boy, my school held fund-raising fairs. Using dollars, my classmates and I purchased as many fair ‘tickets’ as we wanted. We then used these tickets to buy whatever foods and toys were sold at the fair. Of course, some items cost more tickets than other items. Each ticket, though, exchanged for a fixed number of dollars.

Suppose my school had undervalued its fair tickets – that is, suppose it gave too many tickets in exchange for each dollar. (Or, put differently, suppose my school had demanded in return for each fair ticket too few dollars.) Who’d be harmed? The answer is my school. By undervaluing its tickets, my school would have sold its fair items at prices below cost. Its revenue at the end of the day would have been lower than its costs. Rather than raising money, my school would have lost money – and we students would have been made wealthier as a result!

The same holds true for China. If the yuan is undervalued, you can be sure that this policy drains wealth from China rather than builds wealth there – and makes Americans richer in the process.

Posted on 02/18/10 11:45 PM by Alex Adrianson

Does It Matter If the Chinese Dump Our Bonds?

Apparently not, according to the latest data, illustrated in this chart: 

Derek Scissors, Heritage’s China hand, comments:

Yes, there is a huge issue here. But it’s us, not China. We’re mortgaging our future because the President and Congress want a government hand in every aspect of business. We can finance our huge deficit without too much trouble, and in 10 years we’ll be very sorry that we could.

China’s purchases of our bonds are not important and never have been. What matters is our elected officials are acting to ruin the economy. Fix our problems first and worry about China second.

Posted on 02/18/10 06:24 PM by Alex Adrianson

Should Courts Make Global Warming Policy?

A number of recent lawsuits have asked the courts to find big energy companies liable for environmental damages—such as eroding coastlines—that are said to be linked to global warming. (See, for instance, Connecticut v. American Electric Power Company and Comer v. Murphy Oil.) But if carbon emissions contribute to global warming, then all emitters (i.e., everyone) must be part of the problem. How does a court decide that only some emitters should be held liable?

According to a new Washington Legal Foundation paper, it is difficulties like this that should have signaled the courts to throw the cases out. Laurence Tribe, Joshua Branson, and Tristan Duncan explain:

[T]he undifferentiated nature of any one defendant’s contribution to plaintiffs’ injuries enables plaintiffs—if courts let them—to wield the hammer of federal common law against any emitter of their choosing. The Supreme Court has recognized that the Constitution forbids such a contortion of standing principles for the same reason that it forbids courts from entertaining nonjusticiable political questions; the adjudication of such abstract and undifferentiated claims “open[s] the Judiciary to [the] charge of providing ‘government by injunction.’” And government by injunction is neither accountable to majority will nor a product of the “consent of the governed.”

In allowing these cases to go forward, say Tribe, Branson, and Duncan, the courts have improperly sidestepped something called the “Political Question Doctrine” which has historically prevented the courts from considering issues that can be resolved properly only by the political branches. If the courts were to begin awarding damages in these global warming cases, they would in effect be creating a carbon tax regime, which would confound congressional consideration of any such scheme. But unlike a legislatively crafted carbon tax, a judicially imposed one could not easily be altered by voters expressing their displeasure at the ballot box.

For more on the political question doctrine, see “Too Hot for the Courts to Handle: Fuel Temperatures, Global Warming, and the Political Question Doctrine,” by Laurence Tribe, Joshua Branson, and Tristan Duncan, Washington Legal Foundation, January 2010.

Posted on 02/18/10 04:36 PM by Alex Adrianson

Hayek Is Hot

In a little tome published in 1944, Friedrich Hayek identified the pitfalls of a government-planned economy. That book was The Road to Serfdom, and since October 2008 its sales (University of Chicago Press, 2007 edition) have quadrupled. It might just have something to do with the political climate, says Bruce Caldwell, series editor of the University of Chicago Press’s “The Collected Works of F. A. Hayek”:

I think that the underlying reason for the sustained interest in Hayek’s book is that it taps into a profound dissatisfaction in the public mind with the machinations of its government. Both Presidents Bush and Obama have presided over huge growth in the size of the federal government and in the size of the federal deficit, with little obvious effect on unemployment. Things seem out of control.

Furthermore, a recurrent theme in the news is that, in contrast to the millions who are suffering, the politically connected are doing just fine. The examples are everywhere, from bailed out financiers getting huge bonuses to public union employees getting hefty pensions, from auto companies that are nationalized instead of going belly up to politically savvy firms that get government subsidies to produce products that would be otherwise unprofitable.

For people upset by such trends, “The Road to Serfdom” opens a window onto another time, when debates about how best to restructure an economy emerging from wartime were taking place. Such debates, as the strong sales of the book clearly show, still have resonance today.

Posted on 02/18/10 11:43 AM by Alex Adrianson

A Defining Statement of Constitutional Conservatism

Opposition to ever-bigger government has been well and justly expressed in various forums over the past year. Today, however, a broad coalition of conservative leaders has issued a statement that goes beyond mere opposition to particular liberal policy proposals. “The Mount Vernon Statement” lays out the case for a constitutional conservatism to provide the principles around which economic, social, and national security conservatives can unite to move the country forward.

Calling for a return to our nation’s Founding ideals, the statement reads in part:

The conservatism of the Declaration asserts self-evident truths based on the laws of nature and nature’s God. It defends life, liberty and the pursuit of happiness. It traces authority to the consent of the governed. It recognizes man’s self-interest but also his capacity for virtue.

The conservatism of the Constitution limits government’s powers but ensures that government performs its proper job effectively. It refines popular will through the filter of representation. It provides checks and balances through the several branches of government and a federal republic.

A Constitutional conservatism unites all conservatives through the natural fusion provided by American principles. It reminds economic conservatives that morality is essential to limited government, social conservatives that unlimited government is a threat to moral self-government, and national security conservatives that energetic but responsible government is the key to America’s safety and leadership role in the world.

A Constitutional conservatism based on first principles provides the framework for a consistent and meaningful policy agenda.

• It applies the principle of limited government based on the rule of law to every proposal.

• It honors the central place of individual liberty in American politics and life.

• It encourages free enterprise, the individual entrepreneur, and economic reforms grounded in market solutions.

• It supports America’s national interest in advancing freedom and opposing tyranny in the world and prudently considers what we can and should do to that end.

• It informs conservatism’s firm defense of family, neighborhood, community, and faith.

Please visit The Mount Vernon Statement Web site to read the whole statement and consider joining the list of signers which includes The Heritage Foundation’s Ed Meese and Ed Feulner, Family Research Council’s Tony Perkins, Americans for Tax Reform’s Grover Norquist, Concerned Women for America’s Wendy Wright, Americans for Prosperity’s Tim Philips, National Review’s Kathryn Jean Lopez, columnist and talk radio host Herman Cain, and many other conservative leaders.

Posted on 02/17/10 04:46 PM by Alex Adrianson

Higher Ed’s Contribution

College graduates are only slightly more knowledgeable than non-graduates about the history and the institutions of the United States, according to the latest report on civic literacy from the Intercollegiate Studies Institute. But, says ISI, colleges do make a difference: Earning a bachelors degree makes a person more likely to favor same-sex marriage and abortion on demand and less likely to favor teacher-led prayer in public schools. Those with college degrees are also less likely to believe that anyone can succeed in America with hard work and perseverance, and less likely to believe the Bible is the Word of God.

But here is a positive takeaway from the ISI survey: The more people know about U.S. history and institutions (the higher they score on ISI’s civic literacy exam), the more likely they are to have positive views of the country and its Founding ideals. Gaining civic knowledge makes people less likely to agree with the statement, “America corrupts otherwise good people,” and less likely to believe that America’s Founding documents are obsolete. Greater civic knowledge also makes people more likely to believe that prosperity depends on entrepreneurs and free markets.

See “The Shaping of the American Mind: The Diverging Influences of the College Degree & Civic Learning on American Ideals,” published by the Intercollegiate Studies Institute, 2010. Also: This report will be the topic of an event at The Heritage Foundation on February 22 at noon.

Posted on 02/17/10 12:15 PM by Alex Adrianson

Who Watches the Watchers?

The independent body that oversees the expenses of the British Members of Parliament has spent £6.6 million without even processing any claims, reports the (London) Times. Creating the Independent Parliamentary Standards Authority was Parliament’s response to last year’s revelations that various members of Parliament had spent official funds on inappropriate items such as home repairs and adult movies. The Times notes: “[I]n its first year the authority will cost about six times the amount MPs have been ordered to repay.”

Posted on 02/16/10 12:01 PM by Alex Adrianson

Weather Is Not Climate

Skeptics of global warming have had some fun taking the alarmists to task for their shifting views of what constitutes evidence of global warming. As well they should. Last week, Jacques Rogge, President of the International Olympic Committee told AFP that global warming was to blame for a lack of snow at Cypress Mountain, the site of the skiing events at the Vancouver Winter Olympics. Meanwhile, Time magazine ran an article linking last week’s blizzard on the East Coast with global warming. If both snow and no snow can be proof of global warming, then it would seem that the alarmists’ arguments lack a certain amount of rigor.

But skeptics should note: Observing the apparent contradiction does not suffice as disproof of global warming either. Roger Pielke Jr. explains:

What happens in the weather this week or next tells us absolutely nothing about the role of humans in influencing the climate system. It is unjustifiable to claim that a cold snap or heavy snow disproves or even casts doubts [on]predictions of long-term climate change. It is equally unjustifiable to say that a cold snap or heavy snow in any way offers empirical support for predictions of long-term climate change. This goes for all weather events.

Further, it is professionally irresponsible for scientists to claim that some observed weather is “consistent with” long-term predictions of climate change. Any and all weather fits this criteria. Similarly, any and all weather is also “consistent with” failing predictions of long-term climate change. The “consistent with” canard is purposely misleading.

Knowledge of climate requires long-term records – on the time scale of a decade and longer. Don’t look to the weather to learn about climate, unless you have a long time to watch. Using the weather to score cheap political points in the climate debate appears to be a tactical area of agreement among those who otherwise disagree about climate change.

Posted on 02/16/10 11:41 AM by Alex Adrianson

Some Schools Are More Equal than Others

In North Carolina, charter schools that fail to meet goals for academic progress get shut down, while traditional public schools that fail to meet those standards get rewarded with higher funding.

But what if the state applied the same closure policy to all of its public schools? The answer is probably not one that the State Board of Education wants to hear. According to a new paper by Terry Stoops, an education expert at the John Locke Foundation, in the past three years there have been 155 district schools around the state whose lack of academic achievement would have triggered closure if they had been charter schools. Stoops also finds that three alternative district schools would close, while six charter schools would close. The closure rate for district and district alternative schools would be 6.5 percent, compared to 6.2 percent for charter schools.

Clearly, if the threat of closing a school can induce greater achievement, then North Carolina stands to gain greatly from applying its school closure policy equally to all of its public schools.

Posted on 02/11/10 03:54 PM by Alex Adrianson

The Green Police—Not Just an Insipid Commercial

Some might think that Audi “Green Police” commercial foretells the development an environmental police state. Others might think it an outlandish caricature.

But judging from some of the environmental ordinances that have been either passed or proposed in the past few years, the spot is a fair chronicle of the jackbooted tendencies already on display in the fever swamps of environmentalism.  

As we pointed out in a post last week, some researchers think that school choice should be limited if it increases the amount of driving that is needed to get the kids to their schools.

The Food Climate Research Network at the University of Surrey wants to limit people to four modest portions of meat and one litre of milk per week, as well as force people generally to cut down on the empty calories found in alcohol, sweets, and chocolates. Fewer calories consumed means fewer greenhouse gas emissions needed to produce those calories.

Concerned about the contribution of idling to greenhouse gas emissions, Ottawa, Canada, won’t allow drive-thru restaurants in certain sections of the city.

Even though the mercury in fluorescent light bulbs can be an environmental hazard, governments throughout Europe and in Australia have decided that their citizens must use fluorescent bulbs and have banned incandescent light bulbs.

The Seattle Parks and Recreation Department has considered banning beach bonfires.

And the campaign against bottled water has been well documented. But this past week in South Milwaukee, the city actually handed out bottled water for free because the city’s water supply had been contaminated. At least one government sees the value in having bottled water as an option.

You may not see the “green police” at work, but they’re there all the same.

Posted on 02/09/10 12:02 PM by Alex Adrianson

What If Corporations Really Did Have No Constitutional Rights?

A common objection to the Supreme Court’s Citizens United decision, which struck down limits on political speech by corporations, is that corporations do not deserve First Amendment protection because they are not people. Cato Institute fellow Ilya Shapiro explains why that argument is so much nonsense:

[W]ould the “no rights for corporations” crowd be okay with the police storming their employers’ offices and carting off their (employer-owned) computers for no particular reason? — or to chill criticism of some government policy. 

Or how about Fifth Amendment rights? Can the mayor of New York exercise eminent domain over Rockefeller Center by fiat and without compensation if he decides he’d like to move his office there?

So corporations have to have some constitutional rights or nobody would form them in the first place.  The reason they have these rights isn’t because they’re “legal” persons, however — though much of the doctrine builds on that technical point — but instead because corporations are merely one of the ways in which rights-bearing individuals associate to better engage in a whole host of constitutionally protected activity.

Posted on 02/05/10 12:07 PM by Alex Adrianson

40 Ex-Lobbyists Working in Obama’s Lobbyist-Free Administration

Although Barack Obama promised lobbyists would not serve in his White House, and issued executive orders restricting former lobbyists, more than 40 ex-lobbyists now populate top jobs in the Obama administration, including three Cabinet secretaries, the Director of Central Intelligence, and many senior White House officials.

At the Washington Examiner, see Tim Carney’s working list of ex-lobbyists in the Obama administration.

Posted on 02/05/10 11:53 AM by Alex Adrianson

Worth Checking Out: How to Let Wall Street Fail; Learn Activism at CPAC

• How do we let financial firms fail without threatening the rest of the economy? Nicole Gelinas, author of After the Fall: Saving Capitalism from Wall Street—and Washington, will take up that topic at a breakfast forum at the National Press Club on Thursday, February 11. The event, hosted by the Manhattan Institute and the journal National Affairs, runs from 8 a.m. to 9:30 a.m.

• The annual Conservative Political Action Conference is coming up this month. This event just keeps getting bigger and better. In addition to hearing the usual top-flight speakers, you’ll be able to partake in several workshops on student activism and Internet activism. So put it down on your calendar for February 18 – 20. What other event lets you both learn about state nullification and meet a World Series of Poker champion?

• Like think tanks?  Like Twitter lists? Check out our list of think tanks on Twitter at www.Twitter.com/InsiderOnline/think-tanks. You can also find a variety of other conservative institutions and outlets on Twitter at www.Twitter.com/InsiderOnline/lists. If we’ve missed anybody, let us know.

The Red Chapel may resemble a sequel to Borat, but its subject is much more serious. Danish Filmmaker Mads Brügger got his cameras inside North Korea by fabricating a pro-socialist, comedy troupe, The Red Chapel. As one can imagine, the faux show is bizarre enough, but the North Koreans insist on stripping the show of every non-Korean element and end up making the it even worse. The movie, however, fared quite well at the Sundance Film Festival, winning the World Cinema grand jury prize this past weekend.

The Free Market Foundation of South Africa has been doing great work exposing the failures of interventionist economics in South Africa. And they’ve now been recognized for that work: The Atlas Foundation has awarded the think tank its 2010 Freda Utley prize.

Posted on 02/05/10 11:42 AM by Alex Adrianson

The Inventory Omen

U.S. gross domestic product grew 5.7 percent in the fourth quarter, which sounds pretty good. But wait: Kevin Hassett points out that more than half of that increase in output (3.4 percentage points) went to increasing inventories. That can’t continue:

Since 1970, there have been nine quarters, like the last one, when GDP grew by at least 3 percent and inventories accounted for at least half of that growth. The history of those quarters is hardly a favorable sign of what is in store.

Inventory spikes make for blowout quarters. In the nine quarters with such spikes, the average growth rate was 6.6 percent and the average inventory contribution was 4.4 percent, even higher than what was observed for last quarter.

Spikes also produce hangovers. The average growth rate in the quarter after a spike was 0.9 percent, a whopping 5.7 percent lower. In the second quarter following a spike, the average growth rate is just 1.6 percent.

Posted on 02/04/10 11:05 PM by Alex Adrianson

Penn State Stands By Its Mann

Penn State University has cleared Michael Mann on three out of four counts of professional misconduct. Last fall, a cache of e-mails came to light showing that Mann and climatologists at the University of East Anglia’s Climate Research Unit had discussed concealing, destroying, and manipulating global warming data. Those who haven’t yet sampled the relevant e-mails can find a good selection in a lengthy review by the Commonwealth Foundation, Pennsylvania’s free-market think tank. Mann comes across as a thin-skinned, intellectual bully. Of course, being a thin-skinned, intellectual bully is not in and of itself a violation of professional standards. But, as the Commonwealth Foundation points out, Penn State has an interest in seeing the controversy go away and research grants for its meteorology department continue to flow. Penn State is also funded by taxpayers. So, says the Commonwealth Foundation, “the Pennsylvania General Assembly should commission an external and independent investigation into Mann’s potential scientific misconduct.”

The committee reviewing Mann’s work could not reach a determination on a fourth allegation. It recommended that another committee, composed of faculty peers from diverse fields, be formed to investigate whether Mann “engaged in, directly or indirectly, any actions that seriously deviated from accepted practices within the academic community for proposing, conducting or reporting research or other scholarly activities.” Stay tuned.

Posted on 02/04/10 06:16 PM by Alex Adrianson

When Politicians Say Temporary …

When the stimulus was debated last year, many folks pointed out that the extra $87 billion for Medicaid in the package could not reasonably be described as merely a temporary stop-gap for state budgets. What would states do when the funding expired? Kick people off of the Medicaid rolls? No, they would come back to Washington for further bailouts, and Congress would oblige.

The budget proposal released this week by the White House confirms these predictions: The Wall Street Journal reports that the budget includes a six-month, $25 billion extension of the Medicaid boost that states received in last year’s stimulus bill. Not surprisingly, the states used that extra Medicaid money to expand coverage. The Journal quotes Washington Gov. Christine Gregoire: “We think some of those people who are now coming on Medicaid are a segment of the population who have never been on Medicaid.” The Journal further notes: “In fiscal 2009, states estimate Medicaid enrollment grew by an average of 5.4%, the highest rate in six years, according to a survey by the Kaiser Family Foundation. That rate is expected to increase to 6.6% in fiscal 2010.”

This isn’t the first time that politicians have sold a permanent expansion of government as merely temporary. For a good discussion of incrementalism, lying, and other strategies used by politicians to expand government, see Charlotte Twight’s book Dependent on D.C.

Posted on 02/03/10 06:22 PM by Alex Adrianson

More Money for ACORN?

The White House’s 2011 federal budget includes $3.99 billion for Community Development Block Grant programs, and one of the groups likely to get a chunk of that funding is ACORN—the group that was caught on video giving advice on how to start a brothel to two undercover filmmakers.

Hey, didn’t Congress vote to defund ACORN over that? Yes, but the group’s lawyers are trying to convince the courts that Congress acted unconstitutionally when it did so. They say the defunding amounts to an unconstitutional bill of attainder. A bill of attainder is an act of Congress that punishes a group without benefit of a trial. Federal judge Nina Gershon seems inclined to accept ACORN’s argument. She issued a temporary injunction preventing the funding cutoff from taking effect. Matthew Vaddum has more on that at the American Spectator. According to Heritage Foundation legal fellow Hans von Spakovsky, ACORN’s lawyers are wrong: The Constitution’s bar against bills of attainder means only that Congress cannot put someone in jail or otherwise deprive them of their constitutional rights without a trial. Nobody has a constitutional right to taxpayer largess.

Posted on 02/03/10 01:53 PM by Alex Adrianson

Think Globally, Learn Locally?

What more does one need to say about school choice other than that it is good for students? According to the authors of a new paper published by Environmental Science & Technology, school choice policies can contribute to global warming by increasing the distances that children must travel to their schools. These effects, say the authors of “Vehicle Emissions during Children’s School Commuting: Impacts of Education Policy,” should also be considered in evaluating whether school choice policies are worthwhile.

Don Boudreaux writes to the authors:

[W]hy limit your study to proposals for K-12 educational choice? Too many young men and women who attend college surely commute too far – some actually leave their homes to move across the country! – thus poisoning everyone’s lungs in their selfish quest to attend the colleges of their own choosing. Further research by you will likely discover that it’s best to prohibit Americans from attending colleges far from home.

And why stop with education? Perhaps another future study can be on the environmental impact of supermarket choice. After all, with people free to drive wherever they wish to buy groceries, it’s almost certainly the case that too many of us drive hither and yon unnecessarily, wasting our time and fouling the air. I’ll bet that your research will show that restricting each American to shopping only at that supermarket nearest to his or her home will reduce vehicular emissions and, hence, help the environment.

Boudreaux adds: “Indeed, the possibilities suggested by your research are infinite.” Many environmentalists, of course, are already aware of the many possibilities for limiting personal behavior that fighting global warming affords them. They’ve already endorsed restricting meat consumption, rationing air travel, limiting the number of babies people can have, forcing people to eat only locally grown food, outlawing inefficient appliances, telling people what kind of vehicles they may drive, preventing the poor from driving entirely, telling people where and in what kind of house they must live, banning drive-thru restaurants, outlawing incandescent light-bulbs, banning beach bon fires, banning patio heaters, and outlawing bottled water. And in general, they want to make trade and immigration policy subordinate to environmental prerogatives.

All this reminds us of lines from the “One Ring” poem from J.R.R. Tolkien’s Lord of the Rings: “One ring to rule them all, one ring to find them / One ring to bring them all, and in the darkness bind them.” Global warming policy is environmentalists’ “one ring”—it is the issue that subsumes nearly every other issue, and promises the scare mongers the power to dictate nearly every aspect of everyone’s life.

Posted on 02/02/10 06:36 PM by Alex Adrianson

Approaching a Fiscal Precipice

“[M]edian growth rates for countries with public debt over 90 percent of GDP are roughly one percent lower than otherwise; average (mean) growth rates are several percent lower.” That finding comes from a new paper by economists Carmen Reinhart and Kenneth Rogoff:

The sharp run-up in public sector debt will likely prove one of the most enduring legacies of the 2007-2009 financial crises in the United States and elsewhere. We examine the experience of forty four countries spanning up to two centuries of data on central government debt, inflation and growth. Our main finding is that across both advanced countries and emerging markets, high debt/GDP levels (90 percent and above) are associated with notably lower growth outcomes. … Seldom do countries simply “grow” their way out of deep debt burdens.

Why are there thresholds in debt, and why 90 percent? This is an important question that merits further research, but we would speculate that the phenomenon is closely linked to logic underlying our earlier analysis of “debt intolerance.” … A general result of our “debt intolerance” analysis … highlights that as debt levels rise towards historical limits, risk premia begin to rise sharply, facing highly indebted governments with difficult tradeoffs. Even countries that are committed to fully repaying their debts are forced to dramatically tighten fiscal policy in order to appear credible to investors and thereby reduce risk premia. [Internal citations omitted.]

The White House’s 2011 budget proposal, released this week, projects that U.S. debt held by the public will rise from 63.6 percent this year to 77 percent in 2020. How close to the Reinhart/Rogoff threshold do we want to get?

The rise in debt, in case anyone wasn’t sure, is being driven by increases in spending not by a lack of taxing. Heritage fellow Brian Reidl reports that the White House’s proposed budget will “permanently expand the federal government by nearly 3 percent of gross domestic product … over 2007 pre-recession levels,” and “[r]aise taxes on all Americans by more than $2 trillion over the next decade.”

Posted on 02/02/10 02:20 PM by Alex Adrianson

What Does Obama’s Budget Freeze Look Like?

President Obama’s proposed budget freeze would reduce federal spending by about $15 billion next year. But not spending the rest of the stimulus could save $327 billion immediately. Here’s what that would look like if the federal budget were water:

Posted on 02/01/10 05:03 PM by Alex Adrianson

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