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InsiderOnline Blog: April 2009

Who’s Getting Subsidized?

It’s not just the size of government that’s expanding, but the scope, too. According to the latest Catalog of Domestic Federal Assistance, as of 2008 there were 1,804 different subsidy programs funded by the federal government. That’s up from 1,645 in 2005. In 2000, there were 1,425 subsidy programs. The numbers from 2008, of course, don’t include any new programs created by the government’s recent spending spree.

Cato’s Chris Edwards has tallied the increases by department; he finds that the Departments of Agriculture and Homeland Security are home to a large share of the new programs. The farm bills of 2002 and 2008 have increased the number of agriculture subsidy programs by 74. The creation of the Department of Homeland Security, meanwhile, yielded 66 new subsidy programs. About Homeland Security grants, Edwards comments: “While those are important activities, it would be more efficient if they were funded locally because Congress often steers such funds to projects of dubious quality and little national security relevance.”

Posted on 04/30/09 06:20 PM by Alex Adrianson

A Disillusioned Government Planner

In 1983, when William Stern became chairman and chief executive of New York State’s Urban Development Corporation, he believed that government planners knew how to promote economic development in big cities like New York.

By 1985, however, Stern had become disillusioned by corruption in the state’s efforts to use its economic development authority to revive the increasingly seedy and unsafe Times Square. Stern left government with a different view of government-directed economic planning, a view he shares in the recent Institute for Justice monograph, “The Truth About Times Square.”

Today in Times Square, the sex-oriented businesses are gone, unaccompanied women can get service at restaurants, criminal activity is almost nonexistent, and business is booming. And it all came about, says Stern, because private developers stepped in after the city/state development project collapsed.

Stern identifies some lessons for other cities:

First, public safety is essential if there is to be civil society. Without civil society there is no economic stability and growth. Crime poisons economic activity, and this is true not just in Times Square but in neighborhoods all over the country and the world. Times Square became “The Great White Way” without a government development plan and became a sewer because government failed to meet its core responsibilities.

Second, states and cities should rethink using condemnation power to take property from one private owner and give it to another private owner. To use that power is to open a Pandora’s Box filled with influence peddling and power brokering, which is always sleazy and often corrupt. This process compromises government officials, the media and all who have anything to do with it. Eminent domain was not needed in Times Square. In fact, it delayed the development, added tremendous cost, and was unfair and inefficient. There was no shortage of developers willing to acquire property the old-fashioned way—through the private market. They just needed government to do its core job: Ensure public safety so commerce could thrive.

Third, tax policy is important, and to have development, local governments must have a competitive tax structure. If they do not, the fairest and most economically efficient way of addressing the problem is to lower taxes across the board and not try to select individuals and corporations who are more “worthy” of paying lower taxes, for the latter also breeds a sordid “me and my friends” political process. For example, can anyone honestly identify a logical, empirical, non-political reason why the new headquarters of The New York Times, which is located in the project area, required every tax break and government subsidy imaginable, while the myriad restaurants, shops and small businesses required no tax relief?

Posted on 04/30/09 03:56 PM by Alex Adrianson

What Obama Should Learn from France

President Obama seemed to enjoy his visit to France. Veronique De Rugy, a native of France now working at the Mercatus Center, hopes Obama doesn’t confuse culture with good economics. In the video below, she points out that over the last 30 years the United States economy has grown 2.9 percent annually, while the French economy has grown by only 1.9 percent annually. The difference, of course, is that France has higher taxes, more government spending, and greater government regulation of the economy. Maybe someday there’ll be a museum of bad economic ideas. Until then, there’s France.

Posted on 04/30/09 11:24 AM by Alex Adrianson

The Handmaidens of Statism

From Independent Institute historian Robert Higgs, “A Dozen Dangerous Presumptions of Crisis Policymaking that lead to permanent increases in the size of government:

1. Nothing like the present situation has ever happened before.
2. Unless the government intervenes, the situation will get worse and worse.
3. Today is all-important; we must act immediately.
4. Government officials must act, knowledgeably or not.
5. We may safely rely on the establishment for expertise.
6. We may trust government officials to act responsibly and effectively on the basis of the expertise they command.
7. The clear benefits of quick government action may be assumed to outweigh its costs and its actual or potential negative consequences.
8. Fact finding, deliberation, study, and debate are too time-consuming and must be forgone in favor of immediate action.
9. Existing structures and incumbent firms must be preserved; new structures and firms are unthinkable.
10. If a policy is not getting the results its proponents promised, more money should be poured into it until it finally “works.”
11. We must not be deterred by the accumulation of public debt; there is no practical limit to the amount the government may safely borrow.
12. The occasion demands that policy makers put aside partisan maneuvering and act entirely in the general public interest, and we may expect them to do so.

Posted on 04/29/09 01:16 PM by Alex Adrianson

Educating the Poor with Free Markets

Some of the poorest people in the world are finding alternatives to badly run government schools. James Tooley writes about them in his new book The Beautiful Tree. His investigations found that parents all over Africa, China, and India willingly pay tuition for their children to attend private schools. And their choices appear to be paying off; according to Tooley’s assessments, the private schools are doing a better job of teaching than the government schools. Below is a clip from a documentary based on Tooley’s book:

Posted on 04/28/09 07:02 PM by Alex Adrianson

Atlas Liberty Forum: Fundraising = Building Relationships

Over the weekend, the Atlas Liberty Forum featured a good panel discussion on “outside the box” fundraising. A couple of notes from the panel:

• You may have heard of reason.tv’s Drew Carey project. That (and a major gift from Carey) all came about, said panelist and Reason President David Nott, after a relationship with Carey had developed over many years. Carey took most of the initiative, deciding as a subscriber to attend a meeting with the editors of reason magazine (they weren’t even sure it was the Drew Carey who has RSVPed until the meeting took place). Carey was given a Reason t-shirt, which he subsequently wore on television. Nott cultivated the relationship by sending regular personalized e-mails to Carey letting him know what was going on at the Reason Foundation. Eventually, Carey did an event for Reason in Las Vegas. After that, it was Carey who approached Reason with the idea of doing the documentaries that eventually became the Drew Carey project.

The important point is that at no time did the Reason Foundation treat Carey as a potential donor. Nott believes that if Reason had done so, Carey would not have been drawn to the idea of working with Reason—and would not have ended up as a major donor to the organization.

• In seeking to build relationships with potential donors, don’t overlook the value of the social media tools available on Web 2.0—blogs, social networking platforms, RSS feeds, YouTube, Twitter. According to panelist Ryan Green, of Robert Russell & Associates, interactive media is an ideal way of inducing people to take action on behalf of a cause they care about. Getting people to be active on behalf of a cause can be the first step in building a relationship that over time will lead the activist to become a donor. And people are willing to give online, too. Green noted a recent study found that 51 percent of major donors prefer to give online because it is more convenient than giving by mail.

Posted on 04/28/09 06:24 PM by Alex Adrianson

Night of the Living Government

You really only need about four minutes to understand what your government is up to—four minutes to watch to the latest episode of Klavan on the Culture.

Posted on 04/27/09 12:39 PM by Alex Adrianson

Resource Bank: Are We Serving Liberty Well?

You might think you don’t need to sit through another variation of the “we need to make sure we are using the right language so that we are connecting with the things that people really care about” sermon from a political consultant.

But darn if Alex Castellanos didn’t make the theme engaging for an hour-plus presentation yesterday afternoon at Resource Bank. Castellano has a couple important points that all in the conservative/free market movement should consider carefully.

First, he says, we are not serving the cause of liberty well simply by identifying liberty as the opposite of government. His argument can be summed up as: “Liberty is not the opposite of government. It is the best way of governing.”

Second, he says, in promoting liberty it is helpful to start with a good definition of strategy. His definition: Strategy consists of identifying imbalances that compel the desired action. That means, for instance, if we think school choice is a desired end, then we need to start by identifying the imbalance that school choice is supposed to fix—i.e., the sorry state of public education.

On one level that might all seem obvious, but ask yourselves this: How many times have you seen publications from various free market groups with titles like “Five Reasons to Support School Choice” or “We Need Consumer-Directed Health Care Now.”—i.e. titles that identify a solution without stating a problem.

Posted on 04/24/09 01:29 PM by Alex Adrianson

Resource Bank: Ramirez Gives Pols a Knee to the Groin

Michael Ramirez isn’t just a great political cartoonist. Resource Bank participants found out Thursday afternoon that he can tell a good joke, too.

One of them went something like this: Colonel Sanders wanted to donate $1.5 billion to the Vatican in exchange for changing the Lord’s prayer from “Give us this day our daily bread …” to “Give us this day our daily chicken … .” So the Pope informed his advisors: “We’ve got good news and bad news. The good news is that we’ve just received a $1.5 billion donation. The bad news is we just lost the Wonder Bread account.”

Such irreverence seems part and parcel of Ramirez approach to political cartooning, too. A great political cartoon, he said, is like a knee to the groin of the recalcitrant politician: “It may not make him sing a different tune, but it forces him to sing a couple octaves higher.”

The audience was also treated to a sampling of Ramirez’s work, including this one:

As you can see, the two-time Pulitzer prize winner doesn’t pull any punches (or knees to the groin)—and he probably doesn’t have too many fans on the Left. You can check out his work in the collection  Everyone Has the Right to My Opinion.

Posted on 04/24/09 01:03 PM by Alex Adrianson

Resource Bank: Under Single-Payer, the Government Literally Decides Life and Death

On Thursday at Resource Bank, Sally Pipes of the Pacific Research Institute shared the incredible story of her mother’s treatment—or, rather, lack thereof—by the doctors in the Canadian health care system. Pipes told the story, which sadly ended in her mother’s death, as a way to illustrate one of the central problems with single-payer health care systems such as Canada’s: When governments make health care “free” to the patient, they must also decide how scarce health care resources are allocated; that means bureaucrats decide whether certain procedures are necessary.

In the case of Pipes’s mother, her government-paid doctor denied her request for a colonoscopy because in his opinion she didn’t have colon cancer and in any case was too old to merit one. Some months later, she started hemorrhaging. By hospital rules, she could be admitted to the emergency room only if she arrived in an ambulance. So she had to wait for an ambulance, and then, after arriving at the ER, she had to wait two more days in “transit waiting”—which meant she wasn’t officially counted as waiting in the ER. Two weeks later, Pipes mother died of colon cancer.

Pipes’s mother’s case is not unique. In Canada, price controls on doctor’s salaries have eviscerated primary care medicine—because the controls have made it more lucrative to be a specialist. Over 5 million Canadians are currently waiting to see a primary care physician. Further, government-imposed limits on resource use mean that doctors often run out of their budgets by early November and stop practicing medicine altogether.

These are some of the things American patients can expect down the road if President Obama’s public plan option—“Medicare for all”—succeeds in its intent of driving patients from the private insurance market into a government-financed system.

Conservatives need to get on the ball and highlight these dangers if the slow-walk toward single-payer health care in American is to be averted.

Posted on 04/24/09 12:02 PM by Alex Adrianson

Resource Bank: How to Embrace New Media

Resource Bank on Thursday featured a panel that offered some good information for organizations looking to upgrade their use of new media tools. The panel was lead by Todd Thurman of the Heritage Foundation, Nicole Williams of State Policy Network, and media consultant Scott Graves.

Here is the panel’s list of action items incorporating new media into your marketing efforts:

Today
• Set up a Facebook account.
                - Establish at least 300 friends.
                - Join various political Facebook groups and causes.
                - GET INVOLVED.
• Set up a Twitter account. [Nicole Williams advises that think tanks should both have an organizational account and encourage their staff to maintain individual accounts in order to multiply the number of channels on which the group’s products are exposed.]
                - Follow at least 1,000 like-minded political activists.
                - Use #TCOT (www.topconservativesontwitter.org).
                - Send tweets and replies to others.
• Learn about YouTube.

This Week
• Identify a tech leader/advisor for your organization.
• Create a checklist of all channels through which your message is delivered.
• Ask your kids about the appeal of text messaging.
• Do a Wikipedia (www.wikipedia.com) search on the terms found in this presentation [for instance: search engine optimization, RSS feeds, wikis, social networks].
• Read Online Politics 101 at www.epolitics.com.

This Month
• Reach out to individual online journalists and bloggers.
• Identify individuals to write fresh, newsworthy content for your organization.
• Identify a technology advocate within your organization.
• Conduct a tech audit.
                - Web site (features, functionality, content, and design).
                - E-mail (size, relevance, and list management software).
                - Survey your audience.
• Get a smartphone (iPhone, BlackBerry, etc.)

Long Term
• Embrace change (like politics, technology is highly dynamic).
• Give tech leader a seat at the table.
• Allocate more funding to technology.
• Commit to continuing education.
• Hire tech-savvy staff.
• Experiment (adopt new technologies).
• Pay attention to new trends.
• Take action!

Some other good insights and bits of advice from the panel:

1. Learn about the “Long Tail.” In his article and book by that name, Wired Editor-in-Chief Chris Anderson explained that as technology makes content production and distribution more affordable, niche markets become easier to serve, which means that narrowly targeted content can be economically as significant as the mainstream “hits” that had previously dominated media.

2. Get on the learning curve now. The tools that will be important in 2012 will not be the ones that were important in 2008. But in order to move up the learning curve, you need to start now. Graves thinks mobile devices will be the next key area of evolution.

3. Learn more at the annual Personal Democracy Forum.

4. Use Google AdWords and Google Grants.

Posted on 04/24/09 09:49 AM by Alex Adrianson

Heading to Los Angeles

We’re heading out to Los Angeles for the annual Heritage Resource Bank, or as Jonah Goldberg calls it, “Resource Bank-apalooza.” The event, which begins on Thursday, should be a wonderful opportunity to connect with folks in the conservative/free-market movement and hear some great panels on how to meet the challenges of promoting liberty over the next few years.

Resource Bank is being held in conjunction with two other important movement-building events, the State Policy Network’s Leadership Development Breakfast and the Atlas Economic Research Foundation’s Atlas Liberty Forum. We’ll be sending reports from Los Angeles, so stay tuned.

Posted on 04/21/09 05:21 PM by Alex Adrianson

Whence Do the Blagojevichs Come?

In the video below, Dan Mitchell makes an excellent and often overlooked point about political corruption: The bigger government is, the more opportunities there are for the wheeling-dealing that leads to corruption. The greater the proportion of the economy controlled by the government, the more attractive politics becomes to those lacking an ethical compass.

Posted on 04/21/09 11:24 AM by Alex Adrianson

Members of Congress Exercise the Choice They Deny Others

Members of Congress appreciate private school options even more than the general public does—judging from the choices members make for their own children. According to a new survey by The Heritage Foundation, 38 percent of members of Congress have at some time sent their children to private schools. The survey also found that 20 percent of the members themselves have attended a private school. Among all U.S. children, 11 percent are currently enrolled in private schools.

It’s a different story, however, when members of Congress are asked to make decisions for other people’s children. Under the omnibus appropriations bill that President Obama signed into law in March, the D.C. Opportunity Scholarship program will not receive funding beyond the 2009-2010 school year unless Congress acts to reauthorize the program. One gets a good idea of which way the wind is blowing on that prospect by noting that the Department of Education has now rescinded 200 scholarships previously awarded under the program. According to DOE, it wouldn’t be good for children start in the program for a year, and then learn that they must return to the D.C. public schools. Those letters were delivered just days after the Department of Education released a study showing that children in the D.C. Opportunity Scholarship program were making significant gains in reading achievement compared to their public school counterparts.

Before final passage of the appropriations bill, Congress declined an opportunity to remove the provision that has now created such uncertainty about the program. Senator John Ensign (R-Nev.) had offered an amendment that would have struck the reauthorization requirement. The amendment was voted down 39-58. Survey author Lindsey Burke notes: “According to the Heritage Foundation’s survey, Senator Ensign’s amendment would have been approved if Members who exercised school choice for their own children had voted in favor of the amendment.”

Posted on 04/20/09 03:17 PM by Alex Adrianson

Tea Parties Reveal Who’s Paying Attention

Understanding the taxpayer tea parties that occurred Wednesday is not rocket science—though perhaps rocket science can help. Physicists tell us that in nature every action has an equal and opposite reaction; and a similar principle seems to hold true in politics. The bigger government gets, the more it must intrude on people’s lives—displacing the strivings, passions, and commitments of individuals with ends derived politically and implemented through the coercive power of the state to regulate, mandate, proscribe, and tax. Because of various efforts since last fall to pump up (or bail out) the economy with new federal dollars, the share of the national economy now controlled by government stands at a near all-time high of 27 percent (surpassed only during World War II). The current and planned deficit-spending binges are a promise of massive tax increases in the future.

This fact should make it completely unsurprising that a political counter-reaction has occurred. The folks attending the taxpayer tea parties have come sensibly to the realization that, as William F. Buckley Jr. put it, “Government can’t do anything for you except in proportion as it can do something to you.”

More remarkable than the tea parties was the media’s incredulity that they should occur at all. Instead of reporting that there might be, say, a reason for the demonstrations, the media got caught up in a debate over whether the tea parties were grassroots demonstrations or “astro-turf”—i.e., organized by right-wing infrastructure. In covering the tea parties, the mainstream media also treated viewers to scatological humor; to attempts by “reporters” to shout down demonstrators; and to efforts to paint the demonstrators as stupid, hate-mongering, fearful, wackos who are not appropriately thankful for the government spending being shoveled their way.

Even venerable media critic Howard Kurtz got it wrong. Of the demonstrators, he wrote: “It’s easy to attack Big Government. But the Hill is opposing even Obama’s modest pruning, such as reining in farm subsidies … . The critics need to get specific.”

Huh? Did we miss the memo saying that the tea party protests are to be directed at Obama but not Congress (or Bush, for that matter)? Farm subsidies? Did Kurtz just return from a seven-month vacation to a different galaxy?

Since September of last year, the U.S. government has committed $700 billion for various bailouts of incompetent bankers, automakers, insurers, and other big corporations; $300 billion for homeowners who can’t pay their mortgages; $400 billion to prop-up Fannie Mae and Freddie Mac; another $700 billion to relieve banks of the toxic assets on their balance sheets; and then there is the $787 billion appropriated to stimulate the economy. These, specifically, are the spending items that a great many taxpayers oppose.  

Meanwhile, the tax code continues to get more complex, and more and more Americans pay no income taxes at all, leaving the tax burden concentrated on a smaller and smaller slice of the country. Six of President Obama’s nominees, including the Secretary of the Treasury, did not pay their taxes correctly. If the media/punditocracy thinks there is nothing to protest, they’re just not paying attention.  

More: In case you missed them, here are links to updates from The Foundry on the Tea Parties:
Morning Bell: Big Government Backlash Brewing
Tea Party Update: Ted Nugent Rocks the Alamo
Tea Party Update: Fox News in Sacramento
Tea Party Update: Rush Limbaugh
Tea Party Update: CNN in Chicago
Lafayette Sq. Tea Party Photos: Patriots In The Rain
Tea Party Update: Olympia, WA
Lafayette Square Tea Party Update
Pics from Lafayette Square Tea Party
Tea Party Update: Santelli Comments
Morning Bell: The Tea Party Movement

Posted on 04/17/09 03:03 PM by Alex Adrianson

Transparency Doesn’t Have to Cost a Fortune

Unlike most government projects, spending transparency Web sites come in under budget more often than they come in over budget. That’s an important fact to remember next time a politician offers up the self serving argument that he’s looking out for taxpayers by opposing transparency. 

Jerry Brito and Gabriel Okolski of the Mercatus Center recently examined the experiences of 10 states that have created spending transparency Web sites. They found that the initial estimates of the cost of creating a transparency Web site exceeded the actual cost in a number of cases. Other states have been able to produce their Web sites by shifting budgetary priorities rather than increasing the budget. Brito and Okolski found only one state where the actual cost exceeded the estimated cost. The chart below provides the details:
 

State

Estimated Cost

Actual Cost

Alaska

created by executive order—cost not available

$15,000–$25,000 from existing budget

Kansas

$280,000 to study possibility

$100,000

Louisiana

$1 million for initial site development

LaTrac within existing resources

Maryland

$400,000 over two fiscal years

Less than $100,000

Missouri

executive order

$293,140 from existing budget

Nebraska

executive order

$38,000

Oklahoma

$40,000 for initial site Development

$40,000 from existing budget

South Carolina

executive order

$25000–$50,000 from existing budget

Texas

$405,090

$310,000

Washington

$244,316 over six years

$300,000


Brito and Okolski also found that creating a good transparency Web site doesn’t have to cost a lot of money. They explain:

Overall, it is not clear whether the amount of money spent on each state’s Web site correlates to the quality of the Web site. Alaska, Nebraska, and South Carolina’s Web sites had the lowest actual cost of those reviewed: $15,000-$25,000, $38,000, and $25,000-$50,000, respectively. All of these sites feature a simple design and show little more than spending data. The similarly priced Oklahoma Web site, on the other hand, includes state funding and revenue data, contains other tools such as a “Citizen Education” section and glossary and features a crisper design than those of Alaska, Nebraska, and South Carolina. The Texas site, which had the highest price tag, includes its own specialized data acquisition interface that goes above and beyond the presentations of the other Web sites; however it did not offer fundamentally different information than other sites.

the rest of the Web sites, all falling within the $100,000–$300,000 range, have a variety of strengths and weaknesses pertaining to the type of data presented, the years for which the data is offered, and the presentation to the user. The key point underscored by some of the less-expensive Web sites that provide a clean presentation of key spending data is that all states are able to mount a solid effort at making financial data more transparent through the Internet.

See the full report, “The Cost of State Online Spending-Transparency Initiatives,” for a discussion of the strengths and weaknesses of each state’s Web site.

Posted on 04/16/09 08:01 PM by Alex Adrianson

Renewable Energy’s Environmental Problem

The environmentalist movement to stamp out the use of fossil fuels may find itself lined up against other environmentalists, reports the Washington Post. That’s because the infrastructure needed for renewable energy eats up a lot more land than does the infrastructure needed for traditional fuels such as natural gas, coal, and nuclear. So requiring utilities to make use of wind and solar power will create new stresses on lands that naturalists would like to preserve as wilderness.  

As the Post reports (see chart accompanying story), producing a terawatt-hour per year of electricity requires 210 square miles of biomass, or 18 square miles of wind turbines, or 14 square miles worth of photovoltaic cells. The equivalent amount of energy produced by natural gas eats up only 7 square miles; by coal, only 4 square miles; and by a nuclear plant, less than 1 square mile.

The Post reports that building a transmission line connecting wind power from the desert in New Mexico to cities in Arizona is already proving to be an environmental challenge, because

… the line would … cross grasslands, skirt two national wildlife refuges and traverse the Rio Grande, all habitat areas rich in wildlife. The graceful sandhill crane, for example, makes its winter home in the wetlands of New Mexicos Bosque del Apache National Wildlife Refuge, right next to the path of the proposed power line. And much of the area falls under the protection of the Interior Department's Bureau of Land Management (BLM). … “Everybody in New Mexico loves the sandhill cranes,” said Ned Farquhar, a former aide to New Mexico Gov. Bill Richardson (D). “We also love our renewable energy. So we have to figure this out.”

Another problem, says the Post:

Grassland birds such as the lesser prairie chicken and the greater sage grouse, both of which are candidates for listing under the Endangered Species Act, appear to avoid vertical structures such as wind turbines and transmission-line towers. This is proving to be a problem in states such as Kansas, an ideal site for wind power, because as more turbines are built, lesser prairie chickens will confine themselves to narrow ranges, fragmenting a population that must be connected to survive.

The title of the Post article uses the word “paradox” to describe these situations, but, as Reason’s Ron Bailey points out, what we have here is really just the pedestrian reality that all valueseven environmental ones—must ultimately conflict with one another. That requires environmentalists to be like everybody else and make tradeoffs. On the other hand, a danger not mentioned by the article is that environmentalists might try to mitigate the conflict between renewable energy and public lands by using eminent domain to build transmission lines across private land. Watch out, property owners.

Posted on 04/16/09 06:03 PM by Alex Adrianson

The Tax Code: Bad for Barbers, Good for Tax Preparers

If this week has given you a special appreciation for the hassle that is the U.S. tax code, don’t worry: You’re not the only one pulling your hair out. David Keating, in a new report on tax code complexity, writes:

The current paperwork burden generated by the Treasury Department, more than 90 percent of which consists of tax forms, now totals 7.75 billion hours according to data derived at RegInfo.gov. That is the equivalent of 3.7 million employees working 40-hour weeks year-round without any vacation. That’s more workers than are employed at the five biggest employers among Fortune 500 companies – more than all the workers at Wal-Mart Stores, United Parcel Service, McDonald’s, International Business Machines, and Citigroup combined.

Individual taxpayers alone will spend an estimated 3.8 billion hours complying with the income tax laws this year, up from 3.6 billion hours last year. Using the most recently reported average employer cost for civilian workers by the Bureau of Labor Statistics of $29.18 per hour, this time is worth an incredible $110.6 billion!

Keating’s report, published by the National Taxpayers Union, is a cornucopia of information. Some other interesting facts from the report:

• The 2009 instructions for form 1040 are the longest they’ve ever been—161 pages. The 1040 instructions were only 117 pages long in 2000.
• The 1040 now takes 32.7 hours on average to complete, which is up from the 32.5 hours it took in 2004.
• The IRS has created a new methodology for measuring the burden of tax compliance, making it impossible to compare compliance costs in years before 2004 with those after. (Very sly, IRS. Very sly.)
• The compliance costs for corporate taxes is $159.4 billion, which is more than half of the amount of revenue that will be collected from corporate taxes.
• Tax law complexity is good for one industry: In 2006, the last year for which data are available, 62.8 percent of tax returns will prepared by professional tax return preparers. That figure is up from 49.9 percent in 1995.
• In 2006 (again the last year for which data are available) 89 percent of taxpayers used either a paid preparer or a computer program to calculate their taxes. The figure was 66 percent in 1996.

Posted on 04/16/09 03:41 PM by Alex Adrianson

So There Was this Wacko at the Taxpayer Tea Party …

CNN’s idea of objective reporting:

The mainstream media didn’t forget to interview this obvious extremist, did they?

Share photos on twitter with Twitpic

Posted on 04/16/09 12:24 PM by Alex Adrianson

Cato U Offers a Course on How Government Grows

The theme of this year’s Cato University is both an important and a topical one: How economic and national security crises have fed the growth of government in the past and are doing so now. The program, titled “Economic Crisis, War, and the Rise of the State,” looks to be a great opportunity to explore the history of government growth in order to find lessons for today.

The event will be held July 26-31 at the Rancho Bernardo Inn in San Diego. For more information, see the Cato University Web site.

Posted on 04/15/09 11:25 AM by Alex Adrianson

Mmmm … Pork

If you’re not sure if the federal government spends your taxes well, you’re just not looking hard enough at the budget. There’s stuff in there for darn near everybody, and the good folks at Citizens Against Government Waste have made it easy to find it all with their annual earmark survey, the 2009 Congressional Pig Book Summary.

Those with a fetish for tattoo removal as a violence-prevention strategy should be pleased with this year’s appropriations. Thanks to Rep. Howard Berman (D), the Providence Holy Cross Foundation in Mission Hills, California, is getting $200,000 to promote peace via tattoo removal. (Ouch!)

Need to reach Pleasure Beach, Connecticut, but don’t feel like rowing yourself from Stratford or Bridegport? Don’t worry; the federal government has you covered there, too. Thanks to Rep. Chris Shays (R) and a $1.9 million earmark, there’ll be a water taxi service available soon.

Sure, the feds may be blowing hundreds of billions keeping incompetent bankers in business, but they’re also sticking up for the arts. The Rialto Square Theatre in Joliet, Illinois, is getting $237,000 for a face-lift. So, theatre lovers, next time you’re in Joliet to catch a show, remember to thank all the other federal taxpayers—and Rep. Jerry Weller (R)—for helping make the “Jewel of Joliet” presentable for Larry the Cable Guy.

Perhaps you have a nagging feeling that the nation’s blueberry crop—99 percent of which is grown in Maine—isn’t quite as good as it could be. If fixing whatever is wrong with blueberries is your idea of a federal priority, then rejoice. Sens. Susan Collins (R) and Olympia Snowe (R), and Reps. Thomas Allen (D), and Michael Michaud (D)—100 percent of whom are from Maine—added $173,000 to your tax tab for low-bush blueberry research.

One could go on. There’s lots more earmarks in the federal appropriations bills this year10,160 of them according to Citizens Against Government Waste. That’s a slight decrease in the number of earmarks from 2008, but the amount spent on earmarks increased from $17.2 billion in 2008 to $19.6 billion in 2009. So next time you aren’t sure you’re getting your money’s worth in government, just pick up the Pig Book, and read all about how the federal government wants to help pretty much everybody with whatever the heck they think they need help with.

Posted on 04/14/09 01:10 PM by Alex Adrianson

Welcome Home Captain Phillips!

Ed Feulner, president of The Heritage Foundation, on the rescue of Richard Phillips, Captain of the Maersk Alabama:

International incidents sometimes hit quite close to home. This was the case last week, when pirates attacked the Maersk Alabama container ship and took Captain Phillips hostage. His brother, Jim, is our Senior Research Fellow for Middle Eastern Affairs here at The Heritage Foundation.

As you can imagine, the captain and his entire family were in our hearts and prayers throughout this harrowing ordeal. On Sunday, our prayers of petition turned to prayers of thanksgiving. We are overjoyed by the news of his deliverance, thrilled at the prospect of his reunion with family and loved ones, and grateful for the skill and nerve of the U.S. Navy Seals.

God bless the Seals. God bless Captain Phillips. Well done, sir, and welcome home.

Posted on 04/13/09 01:18 PM by Alex Adrianson

Tax Freedom Day—Not Really a Holiday

Today is Tax Freedom Day, according to the Tax Foundation. Every year, the group calculates the amount of time it takes the average taxpayer to earn enough money to pay off his tax bill. This year the figure is 103 days, which means working from January 1 to April 13 provides the median taxpayer just enough income to pay his tax bill this year.

So congratulations, median taxpayer. You are now free to work for yourself.

This year’s Tax Freedom Day comes eight days earlier than last year’s Tax Freedom Day of April 21. That might sound like good news, but here is the rest of the story: The Tax Foundation says the main reasons for Tax Freedom Day being bumped forward this year is that the recession has pushed tax collections down faster than incomes have fallen. Meanwhile, the stimulus/bailout parade has been financed mostly with new debt. That means higher taxes in the future. Notice, in the chart below, the sharp divergence between the two different trend lines. The line going down represents Tax Freedom Day getting earlier this year; but the line spiking upward for 2009 measures the total burden of government spending which includes government debt.

As the chart shows, when you add government debt to taxes, the fiscal burden of government has never been higher than it is this year. So, median taxpayer, you’re poorer this year than last year and can expect higher taxes in the future. Happy Tax Freedom Day!

More: The Tax Foundation has produced some handy reference cards and posters providing quick facts about Tax Freedom Day. These items might be useful to, say, anyone attending a Taxpayer Tea Party.

Posted on 04/13/09 12:12 PM by Alex Adrianson

How Deep Is It?

The following video does a good job of putting into perspective the size of the U.S. government’s recent financial commitments:  

Posted on 04/10/09 11:51 AM by Alex Adrianson

Helping People Vote with Their Feet

New Yorkers now have a new tool for assessing their local governments. The Empire Center for New York State Policy has just unveiled a new benchmarking feature as part of its SeeThroughNY Web site. The site allows New Yorkers to compare jurisdictions based on levels of local taxation, government debt, government spending, and other metrics. The Web site could also be valuable for those considering either a move to the state or a move from within the state.

The site provides users with numerous options for producing customized rankings, but it’s still very easy to use. Overall, it’s a good example of how the Web can be used to promote greater transparency in government—an example worth noting for folks in other states who might be considering a similar effort.

Posted on 04/10/09 11:44 AM by Alex Adrianson

Competition Is the Key

School choice can be more than just a “lifeboat” for students needing to escape troubled public schools. When structured correctly, school choice can create competition among both private and public schools to improve their performance.

That, say Jay Greene and Ryan Marsh, is what’s going on in Milwaukee right now. Milwaukee has one of the nation’s largest and longest-running school choice programs. Green, the head of the University of Arkansas’s Department of Education Reform, and Marsh, a graduate student at Northwestern University, did a study recently to see if the existence of school choice induces public schools to perform better in order to discourage students from leaving. They found that, indeed, the more voucher options that students in public schools have, the better they fare academically. School choice, in other words, can help students who stay in public schools, too.

That’s how competition is supposed to work, and, indeed, it’s a major part of the theory behind why school choice should work. Yet critics of Milwaukee’s program have been harping for years on the fact that previous studies have found little difference in academic achievement between students in choice programs and students in public schools. But if schools are competing, then it shouldn’t matter that much whether they are nominally private or public schools.

The idea that it is competition, rather than private management of schools per se, that is valuable has sometimes been lost in the design of school choice programs. For instance, in the District of Columbia, the D.C. Opportunity Scholarship program is now showing results for the kids in the program. Late last week, the Department of Education released a study showing that students in the voucher program for three years achieve a higher reading level than their public school counterparts. That’s good news for the program, but there is no competition created by that success because participation in the program is capped. D.C. public schools don’t have to worry about losing additional students—or money—to the choice program.

The D.C. program is slated for termination next year unless Congress acts to reauthorize it. Given the evidence that school choice works, lawmakers should consider not only reauthorizing the program, but also creating true competition in education by lifting the caps and letting the money follow the students to whatever schools they choose.

Posted on 04/10/09 11:11 AM by Alex Adrianson

Public Plan Guts Private Market Says Study

Creating a public health insurance plan to compete in the private market, according to a leading health care consulting firm, could induce as many as two-thirds of those with private health insurance to drop their coverage and sign-up for the public plan. The public plan idea is central to the health reforms proposed by President Obama and a number of Democrats in Congress, who want to leverage government purchasing power to keep health care costs down.

The Lewin Group, in a study released this week, finds that a public plan offering Medicare-level reimbursement to providers would enroll about 131.2 million people, 119.1 million of which would be those who previously had private health insurance. The estimate is based on the assumption that the government plan would, as a result of leverage over provider reimbursements, offer lower premiums than private plans. Those lower premiums would encourage people to sign up, but the lower provider payments would be a disincentive for health care providers to see patients. Lewin estimates that hospitals would see their annual net incomes decline by $36 billion (4.6 percent), while annual physician net income would fall by $33 billion (6.8 percent).

A two-thirds reduction in the private health insurance market would push the United States in the direction of Canada’s single-payer health care system. Do we want Canadian health care? The National Center for Policy Analysis recently published a paper identifying some of the ways that Canada’s restrictions on health care expenditures produce lower-quality care. The paper notes:

In Canada, “breast cancer mortality is 9 percent higher, prostate cancer is 184 percent higher and colon cancer mortality among men is about 10 percent higher than in the United States.”
Nearly nine out of 10 middle-age American women have had a mammogram, compared to less than three-fourths of Canadian women.
Ninety-six percent of American women have had a pap smear, compared to less than 90 percent of Canadian women.
Fifty-four percent of American men have had been screened for prostate cancer compared to less than one in six Canadians.
Nearly one in three Americans have had a colonoscopy compared to one in 20 Canadians.
The United States has 34 CT scanners per 1 million people, compared to 12 in Canada. The United States has nearly 27 MRI machines per 1 million people compared to about 6 in Canada, according to the Organisation for Economic Cooperation and Development.
• And, according to the Fraser Institute’s “Waiting Your Turn 2007: Hospital Waiting Lists in Canada,” Canadians wait about twice as long as Americans to see specialists, have elective surgery, or get radiation treatments.  

Posted on 04/09/09 05:19 PM by Alex Adrianson

Stimulus for Malfeasants

“The federal government will soon send more than $300 million in stimulus funds to 61 housing agencies that have been repeatedly faulted by auditors for mishandling government aid,” reports USA Today. Reviewing audit summaries provided by the Office of Management and Budget, the newspaper identified 61 housing agencies receiving stimulus aid that have failed three or more audits since 2004. The article continues:

Congress gave the Obama administration permission to withhold stimulus aid from housing authorities that the Department of Housing and Urban Development lists as “troubled” because of factors such as poor maintenance and financial management. But HUD decided to release the money to these authorities because they “should have the opportunity to improve their housing,” spokeswoman Donna White said.

Posted on 04/09/09 02:14 PM by Alex Adrianson

Tell HHS to Protect Freedom of Conscience

Tomorrow is the last day to submit comments on the Obama administration’s proposal to rescind freedom of conscience regulations for health care workers. You can submit your comments via the Web site, ADoctorsRight.com.  

The regulations protect health care workers in federally-funded institutions from being fired or punished for refusing, based on religious or moral convictions, to perform abortions, sterilizations, or any other medical procedure. Since the 1970s, Congress has passed a number of different laws protecting freedom of conscience for health care workers as well as banning HHS from requiring hospitals or doctors to provide specific services as a condition of participating in federal health care programs, such as Medicare or Medicaid. HHS had never written regulations implementing those laws until last year when the Bush administration decided that a November 2007 ethics opinion by American College of Obstetricians and Gynecologists represented a potential threat to health care workers’ freedom of conscience. The ACOG opinion, titled “The Limits of Conscientious Refusal in Reproductive Medicine,” stated:

Physicians and other health care providers have the duty to refer patients in a timely manner to other providers if they do not feel that they can in conscience provide the standard reproductive services that patients request. Providers with moral or religious objections should either practice in proximity to individuals who do not share their views or ensure that referral processes are in place.

The American Board of Obstetricians and Gynecologists, meanwhile, maintains that physicians may have their certifications revoked for violating ACOG rules.

The Obama administration has proposed rescinding the Bush regulations but has not indicated it would put in place an alternate set of regulations to implement the laws that Congress has passed to protect health care workers’ freedom of conscience. The need for clarity in the law is further suggested by a recent survey of Christian Medical Association members. The CMA survey identified numerous examples of health care workers who have been threatened with termination or other punishment for refusing to participate in providing services that they found morally objectionable. Forty-one percent of those who responded to the CMA survey said they had been “pressured to compromise Biblical or ethical convictions.”

Posted on 04/08/09 03:00 PM by Alex Adrianson

A False Argument for Universal Health Care

Proponents of government-run health care have been trying to link their cause to the economic troubles of Detroit’s automakers. They argue that the lack of universal health insurance in the United States means that Detroit automakers—and all U.S. companies—must bear the added expense of providing their employees with health care. But the fact that employers pick up the tab for health care does not make it an extra expense that they bear. At The American, Andrew Biggs explains:

Almost all health economists (91 percent of those surveyed in 2005) agree that “workers pay for employer-sponsored health insurance in the form of lower wages or reduced benefits.” MIT professor Jonathan Gruber, an advisor to the Obama administration, concluded after reviewing the economics literature that “increases in health insurance costs appear to be fully reflected in worker wages.” In other words, healthcare costs do not come out of the automakers’ profits, they come out of their workers’ take-home pay. The reason is straightforward: employers ultimately care only about the total compensation paid to employees, not whether compensation takes the form of wages, benefits, or taxes paid on their behalf.

Consider a simplified example: imagine you are an automaker and you have an employee who, over the course of a year, builds around $50,000 worth of cars. How much do you pay him? Well, the best guess is that you will pay him right around $50,000. You will not pay him $51,000—that would put you out of business. And if you pay him much less than $50,000, your competitors could profit by hiring him away. So $50,000 it is.

But what if he wants health coverage or other fringe benefits that cost, say, $10,000? Well, that has to come out of the $50,000, since otherwise he would receive total compensation higher than what he produces and you would lose money. So even if you formally pay for the employee’s healthcare, he is the one who really bears the burden since it reduces his take-home pay to $40,000.

Now imagine that the government decides to nationalize healthcare. How does that affect things? Well, the market would push your worker’s take-home pay up from $40,000 to $50,000, since as the employer you would no longer be paying for his health coverage. Good news for him? Not really. Assuming the government provides him the same health package he previously received, it would require $10,000 in taxes to finance it. So, after taxes, his take-home pay remains $40,000.

Posted on 04/07/09 11:05 AM by Alex Adrianson

North Korea’s Rocket

A few of points on North Korea’s rocket launch:

1. The launch has been described as a failure because the rocket’s third stage never activated and nothing was put into orbit. But the launch is only a failure if North Korea’s intent was in fact to put something into orbit. The results of the launch are consistent with the interpretation put forward by the United States and its allies: that North Korea was demonstrating its military capabilities. The launch did show that North Korea has figured out multi-stage rocketry. Further, the rocket traveled over 2,000 miles, doubling the range achieved by North Korea in its 1998 test. Another doubling of range would allow North Korea to put a missile in Anchorage, Alaska.  

2. The United Nations seems to be a dead end for organizing an international response. North Korea’s cover story of a satellite test allows China and Russia now to argue that the launch does not violate UN resolution 1718, which forbids North Korea from launching ballistic missiles. According to Reuters, China and Russia have said they will use their security council vetoes to block new UN sanctions on North Korea.

3. Speaking in Prague on Sunday, President Obama said that North Korea’s missile test demonstrates the need for a more rigorous non-proliferation agenda. The primary elements of that agenda, said the President, would be reducing the role of nuclear weapons in U.S. national security strategy, negotiating with Russia a new treaty to reduce U.S. and Russian nuclear stockpiles, aggressively pursuing U.S. ratification of the Comprehensive Test Ban Treaty, seeking a treaty to end the production of fissile materials for use in nuclear weapons, and strengthening the nuclear Nonproliferation Treaty. North Korea’s leaders, if we take them at their word, should be happy to rejoin the NPT under Obama’s efforts to reduce the U.S. stockpile of nuclear weapons. After all, here’s how they explained North Korea’s withdrawal from the treaty in 2003: “To cope with the grave situation where our state security and national sovereignty are being threatened due to the United States and forces following the United States and the US tyrannical nuclear crushing policy toward the DPRK, the DPRK Government took an important measure to immediately withdraw from the NPT.” Do we take North Korea’s leaders at their word?

4. Since it might be just possible that North Korea’s leaders were fibbing when they identified “the US tyrannical nuclear crushing policy” as the reason for its withdrawal from the nuclear Nonproliferation Treaty, and since there may be other countries that want nuclear weapons and ballistic missiles regardless of our wholesome intentions, wouldn’t it be a good idea to have a defense against a missile attack? The Heritage Foundation’s Bruce Klingner has some missile defense to-dos for U.S. policymakers:

• Give U.S. Standard Missile-3 sea-based missile defense interceptors the ability to intercept long-range missiles in the ascent phase of flight before it releases decoys that may confuse or overwhelm the defense.
• Recognize that, because long-range missiles spend a majority of their flight times in space, space-based interceptors constitute the most effective and reliable way to counter future generation missiles that North Korea or other nations may develop. Congress should call on the Obama Administration to prepare space-based missile defense interceptors by constructing a space test bed for missile defense.
• Call on South Korea to deploy a multi-layered missile defense system that is interoperable with a U.S. regional missile network. In the past, South Korea’s progressive administrations have been hesitant to do so for fear of aggravating Pyongyang and endangering Seoul’s engagement policy.

Posted on 04/06/09 03:04 PM by Alex Adrianson

As Congress Plots, Choice Students Make Reading Gains

Students participating in the D.C. Opportunity Scholarship program for three years achieve higher reading levels than their public school counterparts, “equivalent to 3.1 months of additional learning,” according to the latest evaluation from the Department of Education.

Previous evaluations had shown minor but statistically insignificant advantages for students participating in the program. The findings from the latest evaluation, however, are statistically significant, and they offer support for proponents of school choice who have urged patience in assessing the program. School choice advocates have argued that statistically significant results should not be expected until enough children have been in the program for awhile.

The positive results reported today couldn’t have come at a more critical time for the D.C. Opportunity Scholarship Program. Earlier this year, Congress enacted a spending bill that calls for shutting down the program at the end of this school year, unless Congress acts to renew the authorization for the program. Sen. Dianne Feinstein and other key members of Congress have said the decision on whether to renew the program should depend on the results this evaluation.

They now have the results. What will they do?

(Via Dan Lips at The Foundry.)

Posted on 04/03/09 05:35 PM by Alex Adrianson

Rules Are Not Synonymous with Government Dictates

Don Boudreaux, ever the roving ombudsman of the economically illiterate media, sent a letter recently to CNN’s Rick Sanchez. The letter identifies an important distinction that’s helpful for understanding the dangers of ad hoc government intervention in the economy:

Dear Mr. Sanchez:

Re your interview today with economics students at Georgia State University: when a young man said that he is skeptical of government regulation and that he values individual liberty, you derisively accused him of believing that the economy would work well “without any rules.”

The smug assurance of your accusation reveals your gross misunderstanding of the case for free markets. That case is not that rules are unnecessary. Rather, it’s that rules written by politicians and enforced by bureaucrats generally work much less well than do rules that emerge decentrally – rules that evolve from the voluntary interactions and successes and mistakes of individuals each pursuing his or her own goals without being herded by a central authority – rules that are enforced by competition and by the exercise of personal responsibility and that, when sufficiently important, become formalized in case law declared by courts.

The distinction between what you think of as rules and the kinds of rules that permeate successful market economies is perhaps subtle. But it’s also real and important. You should try to grasp it.

Or, as the title of Boudreaux’s post puts it: “Every Sensible Person Understands the Reason for Rules; Too Few People Understand that Rules are Not Synonymous with Government Dictates.”

Posted on 04/03/09 12:09 PM by Alex Adrianson

Coming Up: 32d Annual Resource Bank

Don’t forget to register for The Heritage Foundation’s upcoming Resource Bank. Every year, this event gathers more than 500 think tank executives, public interest lawyers, policy experts, and elected officials from around the world to discuss policy issues and share ideas for promoting free markets and limited government. This year’s event will be held April 23-24 in Los Angeles. For more information, see the Resource Bank Web page, or send an e-mail to resourcebank@heritage.org.

Posted on 04/03/09 11:22 AM by Alex Adrianson

D-Day Minus One: North Korea Making Final Preparations

Recent news on North Korea’s plans to launch a ballistic missile sometime between April 4 and April 8:

• The North Koreans appear to be fueling the rocket for their planned launch, a U.S. defense official told AFP on Thursday. The official added: “But it’s still ambiguous.”

Weather forecasts show Monday to be the optimal day for North Korea to launch its missile, said Dr. Cho Kwang-rae of the Korea Aerospace Research Institute. He added, however, that the weather would be fine for a launch as early as Saturday. Japanese Prime Minister Taro Aso said he thinks a Saturday launch is likely.

Speaking today from Strasbourg, France, President Barack Obama stated:

We have made very clear to the North Koreans that their missile launch is provocative. … It puts enormous strains on the six-party talks ... they should stop the launch. … The response so far from the North Koreans has been not just unhelpful, but has resorted to the sort of language that has led to North Korea's isolation in the international community for a very long time. Should North Korea decide to take this action, we will work with all interested parties in the international community to take appropriate steps to let North Korea know that it can't threaten the safety and security of other countries with impunity.

• In the event of a North Korean launch, South Korea will consider joining the Proliferation Security Initiative, reports UPI. The Proliferation Security Initiative is an international effort, started by President Bush in 2003, to interdict the shipment of banned weapons and technology.

Posted on 04/03/09 10:53 AM by Alex Adrianson

How Will Capping the Charitable Tax Deduction Impact Giving?

Andrew Biggs reports:

According to projections from the nonpartisan Tax Policy Center, $50 billion in charitable donations will be made by taxpayers that would be affected by the Obama proposal if it was enacted. Recent economic research finds that among higher-income taxpayers, a 1 percent increase in the after-tax cost of a charitable donation reduces contributions by about 1 percent. This means that the Obama proposal would reduce charitable donations by roughly $10 billion in 2011 and by $125 billion over ten years. To put that in context, $10 billion is the combined annual private support to The United Way, Salvation Army, American Cancer Society, Food for the Poor, YMCA of the USA, and Feed the Children.

Posted on 04/02/09 04:55 PM by Alex Adrianson

Colorado’s Hospital Cartel

Colorado lawmakers are once again perpetrating some TABOR shenanigans, and this time it’s also a lesson in the problems with federal aid to the states. TABOR, remember, is short for Taxpayers Bill of Rights, which in Colorado limits spending increases and requires lawmakers to ask taxpayers first before increasing taxes. A bill currently in the Colorado House would create what it terms a 5.5 percent “fee” on hospitals’ patient revenues. The bill also forbids hospitals from listing the “fee” as a line item on patients’ hospital bills. It’s as if the legislature thinks that hospitals can’t pass the cost on to patients if they can’t list it on a bill. Linda Gorman, a health care expert at the Independence Institute says it looks like an attempt to evade TABOR.

Here’s the twist to the story that’s also a clue as to what’s really going on: Colorado’s hospitals support the tax on their own revenues. Why? Because the revenues will be recycled back into health care. That additional spending—an estimated $573 million per year—will also trigger additional matching federal funds for health care. Usually when businesses get together and decide collectively to raise prices on their customers, it’s called it a cartel—something that regulators are supposed to prevent. But the state government would be an active participant in this collusion—all for the sake of additional federal dollars.

As if all that weren’t bad enough: Gorman points out that because the tax is levied on hospital revenues, rather than taxpayers generally, it can be expected to raise health insurance premiums which will force more people to drop their private health insurance and get covered by public programs. All in all, it’s a perfect storm for those seeking to erode private markets in health care even further.

Listen to Gorman talk about the bill in the latest Independence Institute podcast. Also, see Gorman’s recent paper, “House Bill 09-1293: Tax Sick People to Create a Hospital Slush Fund.”

Posted on 04/02/09 04:27 PM by Alex Adrianson

D-Day Minus Two: Pyongyang Threatens “Deadly Blows” Against Japan

Recent news on North Korea’s plans to launch a ballistic missile sometime between April 4 and April 8:

• On Thursday, through its official state-run news agency, the North Korea government stated: “Japanese reactionaries, the sworn enemy of the Korean people, are perpetrating the most evil doings over North Korea’s projected satellite launch for peaceful purposes.” It also warned that if Japan intercepts its missile, “the Korean People’s Army will mercilessly deal deadly blows not only at the already deployed intercepting means but at major targets.” North Korea has also begun moving fuel and fueling equipment to the launch site, according to Pentagon officials.

U.S. President Obama and South Korea President Lee discussed North Korea at the G-20 economic summit in London; according to a South Korea official, the presidents agreed that “the international community needs to take stern, unified action against North Korea if the North fires a long-range rocket.”

• The United States and Japan appear to have shelved plans to ask the United Nations Security Council for new sanctions against North Korea if it proceeds with its planned missile launch. U.N. diplomatic sources told Kyodo News that the two countries have decided to pursue tougher enforcement of UN Security Council Resolution 1718, which already covers ballistic missile launches by North Korea. That decision was made in part, say the U.N. sources, because China and Russia have shown a reluctance to support new sanctions against North Korea.

• Anticipating the possibility of additional provocative actions following a missile launch, South Korean and U.S. defense officials have agreed to bolster surveillance on North Korea, reports The Korea Times.

• Its missile launch will cost the North Korean government about $500,000, says Nam Sung-Wook, director of the Institute for National Security Strategy in Seoul, South Korea.  

Writing at National Review Online, counter-proliferation expert Henry Sokolski advises:

… the U.S. should make a serious effort to persuade like-minded states with missile defenses that they should develop a much more reliable capability to shoot down nuclear-capable missiles fired by NPT-violating states — i.e., states that are in noncompliance with their NPT obligations or that have withdrawn before coming into full compliance with them.

The key aim here would be to strengthen the NPT, which is up for review in May 2010, by putting teeth into its enforcement and into IAEA inspections, which the NPT requires. So far, the toughest suggestion NPT and IAEA supporters have made is to require violating states to return the civilian nuclear goods they imported — a highly improbable event. However, if states with missile defenses agreed to direct those defenses against violators’ launches of nuclear-capable missiles, that would give these violating states a real incentive to come back into compliance. The U.S. should take the lead in seeking international consensus on this proposition.

Posted on 04/02/09 12:05 PM by Alex Adrianson

Look Who Else Celebrates Earth Hour

Earth Hour was created in 2007, but some countries have been into the spirit of the event longer than that. Here’s a picture of North Korea from 2002:

Posted on 04/01/09 07:03 PM by Alex Adrianson

Environmentalists in the Dark

In case you weren’t sure that Earth Hour was mainly symbolic …

Toronto Star columnist Katie Gillmor Ellis enthuses: “I loved the deadline. With Earth Hour beginning at 8:30 p.m., I had to get my cooking chores done early.”

At the risk of stating the obvious, scheduling one’s energy consumption so it doesn’t occur during Earth Hour does not reduce one’s consumption overall. It might not even reduce emissions during Earth Hour. From the Philippines, where a lot of folks participated, Businessweek’s Dennis Posadas reports:  

What laypersons need to understand is that even if millions of people turned off their lights, the coal plants did not have enough time to shut off and restart. So in effect, the unused electricity was still generated as a spinning reserve, and it still emitted greenhouse gases. Granted, there was some reduction in the amount of fuel needed to run power plants for that hour because of the reduced load; however, they still had to run at their rated settings.

A check with the Philippines Dept. of Energy and a CEO of a local power company did not reveal any coal plants that actually shut down for Earth Hour. According to several coal industry insiders I spoke with, it is very expensive and requires a minimum of 24 to 36 hours to shut off and restart a major coal plant.

On the topic of shifting consumption, though, it’s worth pointing out that for many years economists have argued that were it not for public utility regulation, electric companies would more readily adopt a pricing scheme that gives consumers incentives to shift their consumption from peak to off-peak hours. (See, for instance, Lynne Kiesling.) A reduction in peak demand would, in turn, reduce the need for generation capacity—i.e., we wouldn’t need to build as many power plants. Environmentalists should spend more of their time protesting the absence of market prices in energy.

Posted on 04/01/09 06:07 PM by Alex Adrianson

D-Day Minus Three: North Korea Escalates Rhetoric

Recent news on North Korea’s plans to launch a ballistic missile sometime between April 4 and April 8:

• North Korea accused the United States of deploying RC-135 surveillance aircraft to spy on the Musudan-ri launch site, where—satellite photos show—a Taepodong-2 ballistic missile has been assembled. The government, through its state-run Korea Central Radio said: “If the brigandish U.S. imperialists dare to infiltrate spy planes into our airspace to interfere with our peaceful satellite launch preparations, our revolutionary armed forces will mercilessly shoot them down.”

• The United States intends to turn to the United Nations following any ballistic missile launch by North Korea, reports Reuters, citing an unnamed U.S. official at the G-20 summit in London. The official told Reuters: “There are U.N. Security Council resolutions so I would expect we would be talking to the U.N. Security Council about how to respond.”

Posted on 04/01/09 12:23 PM by Alex Adrianson

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