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InsiderOnline Blog: May 2007

The Coming Week

Monday: Honor those who have given their lives in defense of the United States.

Wednesday: Hear the story of prosperity’s impact on American politics and culture with author Brink Lindsey at the Cato Institute.

Wednesday: Learn about the dark side of environmental movement. The Heritage Foundation hosts a screening of Mine Your Own Business.

Thursday: Assess the fairness of the U.S. health care system at the American Enterprise Institute.

Thursday: Find out how California’s proposed health care reforms will impact Californians. The Pacific Research Institute hosts a lunchtime discussion.

Posted on 05/25/07 01:24 PM by Alex Adrianson

Heritage on Video

Heritage in Focus: Ed Meese reviews the rhetoric and the reality on the immigration bill … Mackenzie Eaglen debunks some myths about defense spending … Mackenzie Eaglen does it again … James Carafano takes on some myths about defense spending … James Carafano does it again … Steven Groves lays out what’s wrong with the United Nations’s review of  U.S. human rights … Ben Lieberman identifies the sources of gas price increases … Christine Kim looks at the impact of low-skilled immigrants on the size of the U.S. welfare state.

At Heritage: Author Vernon Grose on the politicization of science … a look at U.S.-India relationsLt. Gen. Jack C. Stultz on the increasingly important role of the military’s reserve component …Wendell Cox reviewing the threat of “smart growth” policies to quality of life ... a panel on Air Force modernization.

Posted on 05/25/07 01:23 PM by Alex Adrianson

News You Might Have Missed

Sustainable—the new weasel word. Associated Press:Zimbabwe, a country suffering from acute food shortages and rampant inflation, won approval to lead the important U.N. Commission on Sustainable Development despite protests from the U.S., European nations and human rights organizations.”

Take that, economic orthodoxy! Defying all economic logic, as well as his economic advisors, Iran’s President Mahmoud Ahmadinejad responded to rising inflation by ordering a cut in interest rates, reports The Guardian. On the Tehran stock exchange, Iran’s private banks lost most of their value overnight.

School choice for disabled students. School choice advanced in Georgia this week. Governor Sonny Perdue, reports the (Jacksonville) Times-Union, signed a law allowing parents of disabled students to receive school vouchers worth about $9,000.

Rachel Carson’s legacy. Sunday is Rachel Carson’s 100th birthday. To the folks over at the Competitive Enterprise Institute, that’s a perfect occasion to revisit the legacy of the author of Silent Spring. CEI has launched a Web site, RachelWasWrong.org, that seeks to counter the praise given Carson by many environmentalists. According to CEI, Carson’s exaggerations of the dangers of DDT led to a ban on the mosquito-killing chemical, and as a result many millions of Africans have unnecessarily died from malaria.

Posted on 05/25/07 01:22 PM by Alex Adrianson

Rector: Wall Street Journal Changes Subject on Low-Skill Immigrants

Yesterday, the Wall Street Journal disputed Robert Rector’s recent analysis showing that low-skill immigrants are net tax consumers. Robert Rector responds:

Your May 24 editorial attacks my research on the fiscal costs of low-skill immigration as perpetuating a “myth.” Roughly one-third of immigrant households are now headed by immigrants without a high school degree. My research, based on Census data and other government sources, shows these “low-skill immigrant” households receive, on average, $30,160 per year in government benefits while paying $10,573 in taxes. Thus each such household costs the taxpayer $19,588 per year. Overall, the net cost to U.S. taxpayers is $89 billion per year. My report suggests that the country would benefit fiscally by having fewer low-skill immigrants, who are net tax consumers, and more well educated immigrants who are net tax payers.

How does your editorial refute this finding? By changing the subject. Rather than rebut my contention that low-skill immigrants are a fiscal drag, it presents statistics about how much all immigrants, including college graduates, pay in taxes. Far from refuting my study, this tactic is either misleading or, at best, irrelevant. It certainly does not demonstrate that low-skill immigrants pay more in taxes than they take in benefits.

The editorial also asserts, contrary to the manifest facts, that low-skill immigrants do not receive large amounts of means-tested welfare assistance. It claims that one major “flaw” in my analysis is that I count immigrants as receiving welfare despite the fact that most “are not eligible.”  Immigrants do have limited eligibility for welfare, which is why my report counts the welfare received by immigrant households based on the immigrants’ self-report of welfare receipt to the Census Bureau. If an immigrant household states it got Food Stamps, it is counted as receiving Food Stamps. It is that simple.

As my report explicitly states, this procedure “automatically adjusts for the low use of government benefits by … immigrants,” due to eligibility limits. Unless immigrants are over-reporting their own welfare benefits, one finds that low-skill immigrant households receive about $10,000 per year in means-tested welfare throughout their lifetimes. This figure does not include other major benefits such as public education, Social Security, and Medicare.

By changing the subject and thus failing to engage the facts, your editorial obscures the real fiscal impact of low-skill immigration.

Update: Thank you National Review for carrying Rector’s response.

Posted on 05/25/07 08:55 AM by Alex Adrianson

A Fight Over Public-Private Partnerships

Rep. James Oberstar (D-Minn.) and Rep. Peter DeFazio (D-Ore.) have provoked a debate they probably don’t want. A May 10 letter the two congressman sent to state governors, legislators, and officials regarding public-private partnerships in managing highways prompted a vigorous response from Robert Poole and Peter Samuel of the Reason Foundation. Robert Poole might know a thing or two about using the private sector to improve government services. His bio page at Reason’s Web site says he is credited as the first person to use the word privatization to refer to contracting out of public services.

Anyway, Oberstar and DeFazio’s letter included the banal suggestion that states avoid public-private partnerships that are not in the long-term public interest. The letter also said that the two members would use their positions in the House Committee on Transportation and Infrastructure to “work to undo” any state public-private partnership agreements which they judge deficient. (Oberstar is the committee chairman and DeFazio is the chairman of the Subcommittee on Highways and Transit.)

Poole and Samuel’s response can be summed up as a lengthy and detailed “mind your own business.” According to Poole and Samuel, public-private partnerships are a useful policy tool that makes available new pools of capital at a time of huge highway funding shortfalls. Further, say the two scholars, public-private partnerships inject business judgment into an area that is often unduly influenced by political considerations.

Poole and Samuel also point out:

States with collectively many more years of close involvement in the public-private partnership process, and far more knowledge on this topic than resides in Congress, do not need warnings or threats from Washington, D.C.

The two policy scholars say the members’ letter represents “an outrageous threat and abuse of power” and that “Congressional committees have no business interfering in contracts entered into by state authorities.”

Posted on 05/24/07 05:23 PM by Alex Adrianson

Government: A Self-Licking Ice Cream Cone

Taxpayer-funded lobbying is a growth industry according to Phil Kerpen of Americans for Prosperity:

State governments, local governments, public universities, transportation authorities, and public water utilities spent an astonishing $132.7 million on federal lobbying in 2006, up 148 percent from an already sizable $53.6 million in 1998. Over the entire 1998 through 2006 period, taxpayer-funded lobbying of Congress totaled at least a staggering $875.9 million.

The biggest increases were in lobbying spending by local governments and by public universities. Local government lobbying of the federal government jumped 193 percent from $20.3 million in 1998 to $59.5 million in 2006. Public universities increased their federal lobbying spending from $10.1 million to $31.7 million over that period, a 213 percent jump.

The problem, says Kerpen, is that lobbyists for government entities, unlike those in the private sector, face no restrictions on the amount of gifts they may lavish on legislators and their staffs. That leads to what Kerpen calls a “big government perpetual growth machine” in which government entities spend taxpayers’ money to push for ever more government spending which leads to even higher levels of taxpayer-funded lobbying by government. The graph below, from Kerpen’s report, shows how the growth in taxpayer-funded lobbying tracks the growth in federal budget earmarks.

Posted on 05/24/07 02:24 PM by Alex Adrianson

The Rich Get Richer, and the Poor Get Richer

The Congressional Budget Office’s new report, Changes in the Economic Resources of Low-Income Households with Children, provides some data that are contrary to the standard “rich get richer, poor get poorer” story line.

The CBO finds that, among households with children, the poorest 20 percent had incomes in 2005 that were 35 percent higher than the poorest fifth in 1991. (And that’s after adjusting for inflation, so the increase is a real gain.) As the graph below indicates, the overall increase in income for this group occurred despite a decline in welfare payments—meaning that earned income increased by an even larger percentage.

Sources of Income for Low-Income Households with Children

The report also notes that incomes for the poorest 20 percent of households with children grew faster than did the incomes of other households with children. The CBO points to strong economic growth in the 1990s combined with new welfare policies as likely explanations. The welfare reforms of 1996 typically required welfare recipients to work in order to receive cash assistance. The CBO also cites the expansions of the Earned Income Tax Credit and the State Children’s Health Insurance Program as factors encouraging work.

Posted on 05/23/07 06:26 PM by Alex Adrianson

Duncan Hunter: Fences Work

At Human Events, Rep. Duncan Hunter (R-Calif.) points out that the Secure Fence Act was not a suggestion. The law requires an 854-mile fence, not the 370-mile fence that the Department of Homeland Security has said it will build along the United States-Mexico border. Hunter also points to the San Diego Border Fence as an example of a physical barrier that has been successful in stemming illegal immigration:

Since construction of the San Diego Border Fence began in 1996, the smuggling of people and narcotics has dropped drastically, crime rates have been reduced by half according to FBI statistics, vehicle drug drive-throughs have been eliminated and apprehensions have decreased as the result of fewer crossing attempts.

Posted on 05/22/07 11:43 AM by Alex Adrianson

Deterrence Doesn’t Require a Roundup

Thomas Sowell identifies the canard of the pro-amnesty argument:

[T]here are undoubtedly thousands, perhaps millions, of unsolved crimes and uncaught criminals in this country and we cannot realistically expect to find and prosecute all these fugitives from justice.

But does anyone suggest that our focus should be on trying to normalize the lives of domestic fugitives from justice—“bring them out of the shadows” in Ted Kennedy's phrase—and develop some path by which they can be given an acceptable legal status?

Does anyone suggest that, if domestic criminals come forward, pay some fine, and apply to have their crimes overlooked, they can be put on a path to be restored to good standing in our society?

Just as we don't need to solve every crime and catch every criminal, in order to have deterrents to crime, neither do we have to ferret out and deport every one of the 12 million illegal aliens in this country in order to deter a flood of new illegal aliens.

Posted on 05/22/07 09:49 AM by Alex Adrianson

The Immigration Bill

Lots of reaction to the immigration bill. Here is some of it:

At Red State, Rob Bluey busts the White House’s mythbusting, including pointing out that waiving provisions requiring deportation of illegals amounts to amnesty.

As Matt Spalding and Ed Meese III noted in their recent paper:

The only fair and reasonable way to resolve this dilemma without granting amnesty is to insist that individuals who are unlawfully present in the country return to their countries of origin and then apply, in line and on par with other applicants, for legal entry to the United States. Any program that does not require unlaw­fully present individuals to leave the United States and reenter through legal means if they wish to work or reside here will never satisfy the tenets of good immigration law and would pro­vide an incentive for future violation of the law.

The Washington Times’s judgment:

It’s a disaster for national security, for keeping Islamist jihadists out of the country, for exploding the costs of Social Security, Medicare and Medicaid, for preserving the rule of law, and for that quaint principle called national sovereignty. From the details that have leaked out thus far, the legislation, which provides amnesty for nearly all of the 12 million (or maybe even 20 million) illegal aliens already here, would swell the size of the welfare state in a way we haven’t seen since Lyndon Johnson imposed his Great Society on us four decades ago.

Some numbers from Heritage’s Robert Rector:

In FY 2004, the average low skill immigrant household received $30,160 in direct benefits, means-tested benefits, education, and population-based services from all levels of government. By contrast, low-skill immigrant households paid only $10,573 in taxes in FY 2004. A household’s net fiscal deficit equals the cost of benefits and services received minus taxes paid. The average low-skill household had a fiscal deficit of $19,588 (expenditures of $30,160 minus $10,573 in taxes).

At the state and local level, the average low skill immigrant household received $14,145 in benefits and services and paid only $5,309 in taxes. The average low skill immigrant households imposed a net fiscal burden on state and local government of $8,836 per year.

The fiscal burden imposed by low skill immigrant households is slightly greater at the state and local level than at the federal level. The annual fiscal deficit for all 4.54 million low skill immigrant households at the state and local level in 2004 was $49.1 billion. Over the next ten years the state and local fiscal deficit caused by low skill immigrants on state and local governments will approach a half trillion dollars.

Granting amnesty or conditional amnesty to illegal immigrants would, overtime, increase their use of means-tested welfare, Social Security and Medicare. Fiscal costs would go up significantly in the short term but would go up dramatically after the amnesty recipient reached retirement. Based on my current research, I estimate that if all the current adult illegal immigrants in the U.S. were granted amnesty the net retirement costs to government (benefits minus taxes) could be over $2.5 trillion.

What’s the rush, asks Andrew McCarthy, to deal with the status of illegals?

I hear over and over again that it is important to do something about the status of the 12 - 20+ million illegals who are already in the country. Again I ask: Why? Why is their status—a status they chose with no encouragement from me—my problem?

I am not heartless, and I am not impractical. I am not in favor busting up families, harrassing hardworking people, or wasting sparse resources to round them all up and deport them—I’m content to target enforcement at employers who exploit illegals and illegals who violate our criminal laws. For the rest of the millions, I say leave them be—as we do now (which itself is a form of amnesty). But why on earth do I owe them more than that? Why do they need, in addition, to be awarded with legal status for doing something that was illegal and should be discouraged?

Posted on 05/21/07 05:52 PM by Alex Adrianson

Immigration—Step One: Read the Bill

This week the Senate will take up the Secure Borders, Economic Opportunity and Immigration Reform Act of 2007, with a vote on final passage expected at the end of the week. The bill has been months in the making. Until Saturday morning, nobody outside of a small group of Senators, staffers, and principals from the administration had seen the text of the legislation.

As The Heritage Foundation notes, this would be the most significant immigration reform in 40 years. Everybody who cares about this issue—which should be everybody—should take the time to read the bill.

Secure Borders, Economic Opportunity and Immigration Reform Act of 2007

Update: John Fund comments:

Why the rush? Because, to be blunt, the senators don't trust the American people to make sound judgments on such emotional issues as family reunification and national sovereignty. But the proper response to this is to engage the public in the discussion, not to short-circuit the deliberative process. One of the reasons the American people are cynical about government is that they don't believe its officials take the time to discharge their duties properly. Now a 1,000 page immigration bill is being put before senators for a vote without anyone having the time to study its details. Many will merely be leaning on talking points prepared by their staff.

Update II: The Truth Laid Bear has the Secure Borders, Economic Opportunity and Immigration Reform Act of 2007 in a searchable format that lets readers annotate the text. Lots of commenting going on.

Posted on 05/21/07 10:14 AM by Alex Adrianson

The Coming Week

Monday: Learn about the role of the corporation in America at the Hudson Institute.

Monday: Find out why research does or does not influence education policy at the American Enterprise Institute.

Tuesday: Discover how anti-sprawl policies threaten quality of life, as The Heritage Foundation hosts Wendell Cox.

Wednesday: Hear Sen. John Sununu (R-N.H.) and the Cato Institute’s Sallie James examine the prospects for ending agriculture subsidies at a Capitol Hill briefing.

Wednesday – Thursday: Have a little paradise with your policy. State Policy Network hosts its 2007 Pacific Rim Policy Conference in Honolulu.

Thursday: Be amused by Christopher Buckley, keynote speaker at the Competitive Enterprise Institute’s Annual Dinner and Reception.

Thursday: Find out why health savings accounts are not entirely consumer-directed, yet, at the Cato Institute.

Posted on 05/18/07 02:44 PM by Alex Adrianson

Heritage on Video

Heritage in Focus: James Carafano says there are better ways to find illegal immigrants than requiring every American to check in with Washington before getting a job … Sally McNamara assesses the Blair legacy …  Mike Franc warns taxpayers to pay attention to Congress’s budget blueprint, which contains an implicit tax increase of $3,026 per household per year … Tim Kane surveys economic freedom around the world.

At Heritage: A look at the impact of Boris Yeltsin on relations between the United States and Russia … An examination of the role of grassroots organizations in responding to natural disasters … A panel on corporate social responsibility … A defense of the Bush doctrine on preemptive war …Shedding some light on Kennedy conspiracy theories with author Vincent Bugliosi.

Posted on 05/18/07 02:42 PM by Alex Adrianson

News You Might Have Missed

Food inflation. Food prices are going up nationally, but especially in California, reports the Los Angeles Times. Nationally, food prices are 3.9 percent higher than one year ago, and 5.7 percent higher than a year ago in California. One of the causes cited is the increasing use of corn for ethanol instead of food.

Looking for the line between child abuse and discipline. New Zealand parents are no longer allowed to smack their children with “reasonable force,” reports BBC. Proponents of the new law say it tightens the standard so that parents can no longer claim “reasonable force” as a defense against child abuse charges. New Zealand’s record on child abuse is considered poor. Also, the law’s defenders point out, parents can still smack their kids, but most do so lightly now, and police will now have the discretion to ignore inconsequential incidents.

Choice and civics go together. School choice improves civics education, according to a meta-analysis of 21 different studies conducted by Prof. Patrick J. Wolf of the University of Arkansas. According to a University of Arkansas press release: “A majority of the 59 findings from the 21 studies suggested that the effect of private schooling or school choice on civic values (as compared to traditional public schools) is, if not neutral, then mostly positive. Among the more rigorous studies, more than half of the 23 findings (52 percent) showed school choice or private schooling as having statistically significant positive effects on civic values; 10 findings showed a neutral effect. Only one finding showed traditional public schooling arrangements to be better at enhancing civic values.”

It won’t be efficient if we have to wash twice. New washing machines that meet government requirements for energy efficiency—in effect since January—do not get clothes as clean as do the older models, according to testing by Consumer Reports. New models must use 21 percent less energy, and they often accomplish that goal by lowering wash temperature. But that often lowers washing performance. (via Competitive Enterprise Institute)

Who needs official development assistance? Writes Carol Adelman in the Hudson Institute’s The Index of Global Philanthropy 2007: Private giving from developed nations to poor people abroad is bigger than ever. U.S. private assistance alone, at $95 billion, is three and a half times official government aid.”

Good news for taxpayers, bad news for lawyers. On Wednesday, President Bush signed an executive order barring government agencies from hiring trial lawyers on a contingency-fee basis for work on behalf of the government.

Posted on 05/18/07 02:41 PM by Alex Adrianson

Government’s Favorite Media Flavor: Bland

If government calls something the “Fairness Doctrine,” there’s a pretty fair chance it has nothing to do with fairness (see Orwell). Derek Hunter has some thoughts along these lines in today’s Politico. He points out that liberal members of Congress are proposing to bring back the “Fairness Doctrine”—which means broadcast outlets would have to provide “equal time” for opposing viewpoints—in order to increase liberal voices on radio. But what’s fair about that? Sounds more like putting your thumb on the scale to get the outcome you want.

Hunter predicts that a return of the fairness doctrine would mean the end of talk radio as we know it, as content would become homogenized and stations would lose their identities. Broadcast media is but one part of the great big marketplace of ideas; if conservative voices are succeeding, maybe it’s because their ideas are succeeding.

Posted on 05/17/07 07:06 PM by Alex Adrianson

Doing Science Sometimes Changes Minds

Marc Morano at the Senate Environment and Public Works blog has compiled a list of climate scientists who once accepted the view that global warming is real, catastrophic, and man-made, but are now skeptical of that storyline. It doesn’t seem like there’s a consensus.

Posted on 05/17/07 06:29 PM by Alex Adrianson

What the Cards Tell Us

I’ve thought about having a quote of the week here at InsiderOnline, but it would usually end up being something Don Boudreaux said. So here is this week’s wisdom from Don Boudreaux—a great metaphor for explaining the impossibility of finding “one best” economic arrangement through central planning:

Each time you shuffle a deck, you produce an arrangement of cards that exists for the first and only time in history. The arithmetic works that way. For a very small number of items, the number of possible arrangements—which item is first, which item is second, which is third, and so on—is small. Three items, for example, can be arranged only six different ways. But the number of possible arrangements grows very large very quickly. The number of ways to arrange five items is 120. For 10 items it's 3,628,800. For 15 items it's 1,307,674,368,000. The number of different ways to arrange 52 items is 8.066 times 10 to the 67th power.

This number is so enormous that no human can comprehend it. By way of comparison, the number of ways to arrange a mere 20 items is 2,432,902,008,176,640,000—a number larger than the number of seconds that elapse in the course of 10 billion years. And this number is microscopic compared to 8.066 times 10 to the 67th power.

Of course, as Boudreaux goes on to explain, the real world contains a lot more than just 52 different elements to shuffle around, and most of the possible arrangements are utterly useless. Free enterprise succeeds because it doesn’t require a centralized bureaucracy to sort through the "gigantagazillion" different possibilities. 

Posted on 05/17/07 03:33 PM by Alex Adrianson

Philadelphia Society Looks at Challenges to Conservatism

Wondering how to meet the challenges to conservatism? The Philadelphia Society has some answers. Check the agenda of their 43rd National Meeting for attached audio files.

Posted on 05/16/07 06:09 PM by Alex Adrianson

More Books to Read

Hey don’t spend all your time reading blogs. Read some books, too.

As Lee Edwards says:

There will always be something about a good old print-on-paper book, even in this time of computers, the Internet, iPods, and blogs, that brings the reader into conversation with the author better than any other medium. That’s why the greatest books will undoubtedly remain the key to an education that is liberating of the mind and enriching of the soul.

Lee wrote a whole book on the books he thinks are worth reading. You can find Reading the Right Books at the Heritage bookstore.

And check out Morton Blackwell’s list of 25 books everyone should read, too. Morton’s list is especially worthwhile if you are interested in influencing public policy, and contains choices not on Lee’s list. (Interestingly, Hayek makes Morton’s shorter list twice, but Lee’s list only once.)

I’m also happy to note that my former employer, Stan Evans, has made Morton’s list, with his book The Theme is Freedom.

See also Morton’s thoughts on the importance of reading. He has some ideas on how to reclaim some time for reading, including: “Read during the dull parts of meetings you have to attend.”

I’d like to try that sometime.

Posted on 05/15/07 10:44 AM by Alex Adrianson

Administration to Push Law of Sea Treaty

The Bush administration has told a number conservatives, in a series of private meetings, that it plans to urge the Senate to reconsider and ratify the Law of the Sea Treaty. Ratification would represent a significant break with traditional U.S. diplomacy and the state-based system of international relations. As many critics have pointed out, the treaty doesn’t just set rules for the use of international waters, it creates a supranational tribunal for interpreting and administering such rules. The tribunal could make decisions contrary to U.S. interests, with little recourse for the United States.

The original Law of the Sea Treaty was defeated during the Reagan administration, and other attempts to resurrect it have since failed. Conservatives in particular have objected to the treaty’s threat to U.S. national sovereignty. The administration is conducting the private briefings in an attempt to find some conservative support for the bill.

The treaty is problematic for a number of reasons in addition to its threat to national sovereignty. Here is a reading list for learning more about the Law of the Sea Treaty:

The Law of the Sea Treaty: A Bad Deal for America, by Jeremy Rabkin, Competitive Enterprise Institute Issue Analysis, August 1, 2006

Ratification of the Law of the Sea Treaty: A Not-So-Innocent Passage, by David Ridenour, National Center for Public Policy Research National Policy Analysis No. 542, August 2006

Don’t Resurrect the Law of the Sea Treaty, by Doug Bandow, Cato Institute Policy Analysis No. 552, October 13, 2005

The United Nations Convention on the Law of the Sea, testimony of Baker Spring before The House Committee on International Relations, May 12, 2004

Military Implications of the UN Convention on the Law of the Sea, testimony of Jeane J. Kirkpatrick before the Senate Armed Service Committee, April 8, 2004

The Law of the Sea Treaty, by Carrie E. Donovan, Heritage Foundation WebMemo No. 470, April 2, 2004

Posted on 05/14/07 03:07 PM by Alex Adrianson

The Coming Week

Monday: Listen to George Priest discuss the capitalist foundations of America as he delivers the May Bradley lecture at the American Enterprise Institute.

Tuesday: Examine the economics behind the farm bill at the Mercatus Center.

Wednesday: Assess antitrust consent decrees in theory and practice with Richard Epstein, who discusses his new book at the American Enterprise Institute.

Thursday: Learn how history could have been different. Newt Gingrich talks about his new book Pearl Harbor: A Novel of December 8th in Raleigh, N.C., hosted by the John Locke Foundation.

Thursday: Get an answer to the question: Who really cares? as author Arthur Brooks lays out his findings on charitable giving in the United States. Hosted by Family Research Council.

Thursday: Hear George Will examine the political argument today at the Center of the American Experiment’s 2007 Annual Dinner.

Thursday: Find out whether the U.N. Global Compact will be transformed from a voluntary effort to promote good business practices around the world into a supranational regulatory mechanism. Heritage hosts a panel exploring the nexus between social responsibility and the bottom line.

Posted on 05/11/07 01:13 PM by Alex Adrianson

Heritage on Video

Heritage in Focus: Ernest Istook tells Congress to fund the troops and cut the pork … Todd Gaziano says carving out a separate, race-based government for native Hawaiians is both unconstitutional and racist.

At Heritage: Carl Schramm and Robert Litan identify what makes good capitalism good and bad capitalism bad …  A panel of new media insiders gives its take on efforts to get the House of Representatives to embrace transparency in government … Edgar Terán discusses the challenges faced by Ecuador … A half-day seminar looks at missile defense in Asia and Europe … Kenneth Minogue examines morals and manners in democracy … John Stossel says give free markets a chance in health care.

Posted on 05/11/07 01:12 PM by Alex Adrianson

News You Might Have Missed

Outsourcing helps educational achievement in the United States. Companies in India, reports the Los Angeles Times, are providing tutoring sessions over the Internet to U.S. students—at a fraction of the price American tutors charge, making it possible for many more students to afford help outside their school.

Another reason not to jump at limiting emissions now. The future of energy may well be beneath us, reports Nick Schulz, who points out that there’s loads of heat stored in the earth’s crust. Combining this geothermal energy with water can produce enough steam to turn a turbine to generate electricity. The U.S. Department of Energy and the Massachusetts Institute of Technology estimate that the extractable geothermal energy in the United States exceeds “about 2,000 times the annual con­sumption of primary energy in the United States in 2005.” And harnessing geothermal energy would release no carbon dioxide into the environment. And, says Schulz: “It doesn’t compete with food crops like biomass does, and it can provide base-load electricity without the need for coal, nuclear, or natural gas as backups, unlike wind and solar. Also, a geothermal operation has a far smaller footprint than windmills and solar panels. Geothermal is as green as it gets.” When will this miracle of technology be deployed? A few decades, says Schulz.

The cost of trade barriers. Federal Reserve Chairman Ben Bernanke said in a recent speech that the way forward on globalization is to embrace trade while offering a helping hand to those left behind. Bernanke said numerous studies on the benefits of trade suggest that removing all remaining trade barriers would increase the annual incomes of Americans anywhere from $4,000 to $12,000 per household.

Disparate tax treatment. Internet service is largely tax free, but other forms of communication services are taxed at a rate that, on average, is about double that of general sales taxes. That is the finding of a new study done jointly by the Heartland Institute and the Beacon Hill Institute. The authors contend that there is no economic rationale for the disparate tax treatment, which they say is the legacy of tax and regulatory decisions made before the advent of modern communications.

Did they say “livable” or “leavable”? Places Rated Almanac recently named Pittsburgh the most livable city in the country. The people who actually live there, says Pennsylvania’s Commonwealth Foundation, are voting with their feet in a different direction. Today, says the foundation, only 315,000 people are left in a city built to handle 1 million. Why? Commonwealth: “Pittsburgh is in a death spiral. It’s bankrupt. Its school district spends $16,000 a year per kid. Its parking tax is the highest on Earth: 50 percent. City police and firefighters irresponsibly pad their numbers, salaries, and pensions—and openly trade their mayoral votes for sweetheart contracts. Meanwhile, local school and property taxes are among the highest in the country. So are public bus and taxi fares. And, oh yeah, highways are congested, in bad shape, and under-built.”

Posted on 05/11/07 01:11 PM by Alex Adrianson

Resource Bank in Review

Perhaps you missed Resource Bank but are curious about what goes on when 700 think tank executives, public interest lawyers, policy experts, elected officials, and activists from around the world get together to discuss public policy. Or maybe you can’t recall a vital detail from the whirlwind of knowledge that was thrown your way during two intense, event-filled days.

Now, you can review the whole thing at Heritage’s Resource Bank page. Be sure to click the agenda link, which will give you links to audio and video files for the sessions.

And get ready for Resource Bank 2008, too. We are. It’ll be held in Atlanta on April 24 – 25, 2008.

Posted on 05/10/07 03:04 PM by Alex Adrianson

A Come-to-Jesus Opportunity for Porkers

Citizens Against Government Waste has an interesting idea: Congress as an institution doesn’t reveal the identities of members who send earmark requests to the appropriations committees, but there’s nothing stopping individual members from making their requests public. So CAGW is asking individual members to do so, and is publishing the responses at its Web site. Whatever their pork proclivities, Senators and Representatives now have an opportunity to be on record in favor of earmark transparency—or be on the record against it.

A pretty good idea.

Posted on 05/10/07 02:17 PM by Alex Adrianson

What Civil Servants Know: Universal Doesn’t Equal Good

The Goldwater Institute’s Today’s News has an interesting observation: Spain has a government-run health care system, but civil servants there can opt out by having the government pay for private insurance instead. Ninety-one percent opt out.  

This is another example of big-government hypocrisy, like politicians who support public education but send their kids to private schools, or those who buy green indulgences in order to excuse their jet-setting, carbon-bond-breaking ways while scolding the rest of us for forgetting to turn off the porch light.

Advocates of big government tell us that socializing costs and benefits is the only way to make sure the poor and the unlucky don’t get left behind. But there’s always an out, at least for the connected, the powerful, or the wealthy. So things end up unequal anyway, except that inequality becomes enforced by government policy.

As Glenn Reynolds has suggested, there should be a database for this kind of hypocrisy.  

Posted on 05/10/07 12:37 PM by Alex Adrianson

The Consequences of Ethanol

The United States government provides generous subsidies for ethanol production. Boosters say this is justified because corn-derived fuel can help make the United States less dependent on foreign oil. USA Today notes the rest of the story:

Last year, about 4.9 billion gallons of ethanol were produced. Within a couple of years, that number is projected to rise to about 12 billion gallons, thanks to a building boom in ethanol plants. A proposal in Congress would mandate an increase in ethanol production to 36 billion gallons within 15 years.

Here's the rub. That amount of ethanol, using current technologies, would consume virtually all of America's corn crop.

Even assuming breakthroughs in so-called cellulosic ethanol—which is made from grasses, wood chips and such, and now costs much more than corn-derived ethanol—world food supplies would be stressed.

The benefit from all of this is far less clear than ethanol's newly enriched boosters would have you believe. On Tuesday, in its first major report on bioenergy, the United Nations concluded that while ethanol and other biofuels can help reduce global warming and create jobs for the rural poor, the benefits may be offset by environmental problems and higher food prices. Those costs would hit poorer countries the hardest; rising tortilla prices have already triggered street demonstrations in Mexico.

Here in the USA, higher corn prices translate into more costly meat and poultry, and even more pain for livestock producers, who already are suffering as corn farmers rejoice. They also mean higher prices for crops that are being planted less.

Posted on 05/10/07 11:41 AM by Alex Adrianson

BlueyBlog

Heritage’s Rob Bluey is doing a terrific job of reporting on the efforts of bloggers and other Web-based initiatives to make government more transparent and accountable to citizens. And he’s pretty adept at using technology himself, which you can see by visiting his site BlueyBlog, now blogrolled here at InsiderOnline. At BlueyBlog, you’ll not only be able to follow his work on accountability issues, you’ll also be able to read up on Rob’s miscellaneous adventures—such as seeing the Queen at the White House earlier this week. Go read his stuff.

Posted on 05/09/07 10:29 PM by Alex Adrianson

Library of Congress Doesn’t Like Comparisons to Its Wiki-less Site

Here’s a story (via Ars Technica) that makes you wonder at the inability of some people to see themselves as others see them. In this case, the inability in question belongs to a government agency that provides information to the public about what Congress is up to, the Library of Congress and its Web site THOMAS.

It seems Jim Harper thought he had a better way of getting pertinent information to the public. His Web site WashingtonWatch.com (a side venture from his day job, Cato policy analyst) has always done one thing that THOMAS didn’t. It provided information on the cost of each bill proposed in Congress, and calculated that cost per person, per average family, per family of seven—whatever parameter the user specified. And now his Web site has added Wiki capability, which allows citizens to edit information about the bills. They can offer arguments pro and con on each piece of legislation, making WashingtonWatch.com more of an interactive portal allowing citizens to engage in debates about the merits of legislation.

All in all, Harper thought his site was better than the Library of Congress’s site, THOMAS, and he said so in promotional material for the site. The Library of Congress didn’t like that. The Library’s Director of Communications, Matt Raymond, sent Harper a lawyerly e-mail telling him that the use of the THOMAS name in that fashion was verboten.

To some, it might seem as if the Library of Congress was saying you can only take this accountability business so far, and saying the government’s information service isn’t as good as a privately run Web venture is going too far. But, as Nate Anderson of Ars Technica reports, that’s not how the Library of Congress sees it:

I contacted Raymond about the issue, and he tells Ars that he was acting under Library of Congress Regulation 112, which says that “the use of the Library’s name, explicitly or implicitly to endorse a product or service, or materials in any publication is prohibited, except as provided for in this Regulation.” For Raymond, the issue here is that Harper was critical of the Library’s own work in a way which endorsed his own; as Raymond puts it, “the use of THOMAS in the Washington Watch press release in a negative way is clearly used in the context of endorsement, rather than general criticism.”

As Anderson reports, Harper refused to go along with the request, telling Raymond he’ll use the names whenever he feels like it.

It seems to me that Harper’s WashingtonWatch.com is better than the Library of Congress’s THOMAS—not that I’m endorsing it or anything. See for yourself.

Posted on 05/09/07 10:23 PM by Alex Adrianson

The Insider, Spring 2007

The latest issue of The Insider is out. From my editor’s note, here’s the lineup:

Let’s face it: The Earth’s climate is pretty complex. Even climate scientists disagree among themselves about how it works and what the data on global warming mean. And yet, there seem to be a lot of hyperventilators with a great deal of certitude about the need for immediate and drastic action to stabilize the earth’s temperature. Fortunately, Christopher Horner understands climate science, but he writes like a journalist—a good journalist, that is—which means you don’t have to be a scientist to understand him. He provides a lively account of what we actually know about the earth’s climate and where the global warming alarmists have jumped the rails of real science.

Increasingly, we are told that economic inequality is a growing problem requiring government action to redress. We present here two articles addressing different pieces of the inequality puzzle. First, Kay Hymowitz identifies a growing marriage gap as the most important source of divergence in the country. The evidence is in, says Hymowitz, that family structure is the most significant risk factor for children, accounting significantly for differences in household income, poverty, educational attainment, and problem behaviors.

Meanwhile, economist Richard Vedder cautions that any growth in income inequality is significantly overstated because of the way in which inequality is measured. He also warns against policies, such as higher levels of government spending and taxing, that might decrease inequality but would be harmful to the economy as a whole.

Transparency is the watchword of health care policy these days, but implementing it is real simple, write Devon Herrick and John Goodman: Get government out of the way and move to-ward free market health care.

This year, The Fund for American Studies celebrates its 40th year of teaching the next generation of leaders about America’s principles of freedom, individual responsibility, and free markets. Roger Ream recounts one particular success.

Finally, Kevin Gentry puts the fun back in fundraising with his Top 10 Steps for Fundraising Success.

Posted on 05/08/07 03:36 PM by Alex Adrianson

Tax Increases Foretold

Heritage’s Shanea Watkins describes what will happen if Congress follows through on the proposed House budget resolution:

The House budget resolution has the potential to cost the average American taxpayer an additional $3,026 in taxes. In addition to the increased tax burden, Americans could also see their disposable personal income decrease by an average of $502 due to a weaker economy. More­over, the budget resolution could damage employment growth, causing about one million fewer jobs to be cre­ated, and has the potential to damage economic output by over $100 billion nationally. The average cost of the House budget resolution to each congressional dis­trict amounts to the potential loss of 2,284 jobs that would have otherwise been created and a loss in eco­nomic output by an average of $240 million.

Watkins’s paper provides a district-by-district breakdown of tax increases to come and their economic impacts. Here are the districts that would lose the most:

  • New York’s 3rd congressional district, represented by Peter King (R), would experience the largest increase in tax burden per taxpayer. Each taxpayer there would have to pay an extra $5,740 per year.
  • Connecticut’s 5th congressional district, represented by Christopher S. Murphy (D), would see the largest impact on personal income as a result of the tax increases. By 2012, the average annual per capita personal income for this district would be $722 less than it would be without the tax increases. That loss of income is in addition to the increased tax burden.
  • Nevada’s 3rd congressional district, represented by Jon Porter (R), would experience the biggest impact on jobs. In 2012, the district would see 3,285 fewer new jobs created than would have been created without the tax increases.
  • New York’s 4th congressional district, represented by Carolyn Maloney (D), would see the biggest impact on overall economic activity. In 2012, the district’s gross domestic product would be $618 million less than it would be without the tax increases.

Posted on 05/08/07 11:13 AM by Alex Adrianson

Don Boudreaux’s Reading List

Dang. The list of books I need to read just got a bit longer, thanks to Don Boudreaux who recommends 10 books on economics. Boudreaux’s list consists of books that are well-written and accessible to the non-economist. Now if Don would just step away from the keyboard, I might be able to get to them.

Posted on 05/07/07 04:54 PM by Alex Adrianson

Limited Government Is a Family Value, Too

Folks in some quarters like to emphasize the differences between economic conservatives and social conservatives. While there are real differences, it’s worth noting that most social conservatives can be counted as advocates of small government, too. The Louisiana Family Forum is one such conservative group. Recently, the group decided it needs to speak out more about the growth of government in Louisiana, so it hired a policy analyst dedicated to fiscal issues. Says Gene Mills, Executive Director of Louisiana Family Forum:

Our network serves as a "Voice for Traditional Families" in Louisiana and I must say that we are greatly troubled over the accelerated spending that is taking place in state government. A state with billions of tax dollars in surplus money means that taxpayers are entitled to a return or refund of their money!

Amen.

Posted on 05/07/07 01:42 PM by Alex Adrianson

The Coming Week

Monday: Get some facts on global warming at the Cato Institute.

Monday: Hear John Agresto give his take on the situation in Iraq. The former senior advisor to the Coalition Provisional Authority for Higher Education and Scientific Research discusses his book Mugged by Reality: The Liberation of Iraq and the Failure of Good Intentions at the Hudson Institute.

Tuesday: Listen to John Stossel explain why a government fix for the health care system is a myth. The Heritage Foundation hosts the bestselling author of Myths, Lies, and Downright Stupidity.

Wednesday: Find out if alternatives to altruistic donation can fix the shortage of transplantable organs. America’s Future Foundation hosts a roundtable featuring Dr. Sally Satel of the American Enterprise Institute and Kerry Howley of Reason magazine, with Christie Raniszewski Herrera of the American Legislative Exchange Council as the moderator.

Thursday: Learn how the open government movement is reshaping the House of Representatives. The Heritage Foundation hosts a panel featuring John Wonderlich of the Sunlight Foundation, David All of the David All Group, Matt Stoler of MyDD.com, and Heritage’s Rob Bluey.

Friday: Take a new look at the individual health insurance market at the American Enterprise Institute.

Friday – Sunday: Hobnob with the Howard Center for Family, Religion, and Society and other pro-family organizations at the World Congress of Families IV in Warsaw, Poland.

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

Heritage on Video

Heritage in Focus: Sally McNamara says when it comes to resolve over Iraq, the United States should be more like Britain; Alison Acosta Fraser urges Congress to fund the war promptly without pork; and James Jay Carafano says if it’s a long war, then call it a long war.

At Heritage: A panel assesses the U.N. Human Rights Council after its first year; Linda Bridges discusses her new book, Strictly Right: William F. Buckley and the American Conservative Movement; Fumio Kyuma, Japan’s Minister of Defense, looks at the future of the U.S.–Japan military alliance; Heritage’s Ninth Annual U.S.–Japan Security Strategy Conference examines the security challenges faced by the United States and Japan in the North Pacific region; and John Blundell offers 10 lessons from Margaret Thatcher for achieving change.

Posted on 05/04/07 11:08 AM by Alex Adrianson

News You Might Have Missed

Maine’s health program learns that people respond to incentives. Maine’s effort to get every citizen covered by health insurance has come up significantly short, reports the New York Times. Maine launched its Dirigo program two years ago with the goal of getting 31,000 of its uninsured covered by the end of 2005 and all 130,000 of its estimated uninsured covered by 2009. So far, only 18,800 have signed up for insurance through the government’s plan, and some of those were already covered. The problem, according to the Times, is that the generous coverage provided by the state’s plan is too expensive for some, and premiums have gone up because not enough healthy people have signed up. Governor Baldacci has proposed a number of reforms, including requiring insurers participating in the plan to offer discounts for non-smokers and those in wellness programs. Some health care activists are trying to get a proposal for a government-run single-payer plan placed on the November 2008 ballot.

India’s doing well. Strong economic growth, especially in the last four years, has led to a boom in the ownership of cars and electronic devices in India, reports Agence-France Press. In urban areas, 66.1 percent of households owned a television in 2004–2005, up from 40.5 percent in 1993–1994. In rural areas, 26.5 percent of households owned a television in 2004–2005, compared to only 7 percent in 1993–1994. Meanwhile, car ownership has nearly quadrupled over that time period, and now stands at 4.6 percent. Refrigerator ownership has also increased significantly. In 2004–2005, 31.9 percent of urban families had one compared to only 12.3 pecent in 1993–1994. For rural areas, the figures are 4.4 percent possessing a fridge in 2004–2005 as against 0.9 percent in 1993–1994. (Just think how well India could be doing if it increased the level of economic freedom enjoyed by its citizens. According to Heritage’s 2007 Index of Economic Freedom, India could improve significantly by tackling corruption and making it easier to start a business.)

Sweden begins sell-off of state shares in industry. Elections matter. Sweden’s new center-right government is moving ahead on its promises to divest the government of its ownership of certain companies, reports AP.  First on the sales block is 8 percent of Telecom operator TeliaSonera. The government owns a total of 43.5 percent of TeliaSonera, and says it will sell those shares eventually, too. The government plans, by the year 2010, to sell off 250 billion kroner ($37 billion) worth of assets, which it will use to pay off Sweden’s national debt.

Tenure: What is it good for? According to a survey of faculty opinions, having tenure does not make professors more willing to speak on or publish about controversial subjects, reports Newswise. The survey, conducted by two Cornell professors and a graduate student, “asked 1,004 professors from of all ranks and many disciplines from around the country (derived from an e-mailing to a random sample of 2,700 professors) how they would act and how they believed lower-ranked faculty members would act concerning teaching courses disfavored by senior colleagues, conducting controversial research or whistle-blowing unethical behavior.” The report concluded that all but full professors behave timidly in order to avoid displeasing senior colleagues.

Cities picking green winners. Green practices, technologies, and building materials are gaining favor with a number of hotels and hotel chains, reports Bloomberg. Among the green-friendly features being put into use are low-flow toilets, waterless urinals, recycled paper, solar lights, and recycled construction materials. The trend isn’t exactly a spontaneous expression of virtuous concern for mother Earth, however. Many cities around the country offer a variety of perks for hotels built with green-friendly materials. As Bloomberg notes, the town of American Canyon, Calif., has slashed occupancy taxes for the Gaia Napa Valley Hotel by $1 million per year, and the town of Anderson, Calif., waived a $100,000 environmental impact fee for a similar hotel there. Also, San Francisco has decided to go lightly on the regulations for those who go lightly on the environment. According to city officials, certain projects may have to wait only four weeks for construction to begin instead of eight months. For the truly faithful green traveler, the Gaia Napa Valley Hotel offers something a little extra: Instead of the Gideon Bible, visitors will find a copy of Al Gore’s An Inconvenient Truth.

Posted on 05/04/07 11:02 AM by Alex Adrianson

Not Fessing Up on Earmarks

The Examiner (Washington, D.C.) recently tried to match some budget earmarks with members of Congress, and got nowhere. Examiner reporter Barbara Hollingsworth picked three earmarks from the Office of Management and Budget’s database of 2005 earmarks. The ultimate recipients of each of the three earmarks were companies in the Washington, D.C. area. As she reports, nobody—not any member of Congress, not the companies involved, and not the agencies administering the funds—was willing to step forward with information on which members of Congress were responsible for including the items in the federal budget.

Looking at the glass half full, this might be a sign of progress. It used to be that congressmen crowed about pork they brought home to their constituents. If the culprits now prefer to hide, maybe that’s a sign that they are taking the transparency movement seriously.

Posted on 05/03/07 04:33 PM by Alex Adrianson

Not Buying the New Religion

Alexander Cockburn buck’s The Nation on global warming:

In a couple of hundred years historians will be comparing the frenzies over our supposed human contribution to global warming to the tumults at the latter end of the tenth century as the Christian millennium approached. Then as now, the doomsters identified human sinfulness as the propulsive factor in the planet’s rapid downward slide. Then as now, a buoyant market throve on fear. The Roman Catholic Church sold indulgences like checks. The sinners established a line of credit against bad behavior and could go on sinning. Today a world market in “carbon credits” is in formation. Those whose “carbon footprint” is small can sell their surplus carbon credits to others less virtuous than themselves.

The modern trade is as fantastical as the medieval one. There is still zero empirical evidence that anthropogenic production of carbon dioxide is making any measurable contribution to the world’s present warming trend. The greenhouse fearmongers rely on unverified, crudely oversimplified models to finger mankind’s sinful contribution—and carbon trafficking, just like the old indulgences, is powered by guilt, credulity, cynicism and greed.

Read the whole thing.

Posted on 05/02/07 05:35 PM by Alex Adrianson

Supply Side Matters in Health Care

Josh Hendrickson says it’s not just the demand side (consumer incentives) that matter in health care. Reformers, he says, should look at the supply side, too:

The supply-side is riddled with inefficiencies. For example, the supply of doctors is restricted by licensing and medical school enrollments. Physicians also often act to exclude substitutes such as physician assistants and nurse practitioners. What's more, doctors effectively act as a collective monopoly because of the lack of price competition within their ranks. These restrictions on supply lead to higher prices for patients and higher incomes for doctors. This is especially inefficient considering that patients often lack price information until they receive their statement of benefits in the mail.

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

Health Savings Accounts Could Be Even Better

Newsflash: John Goodman is a fan of Health Savings Accounts. His latest testament to that effect is a thought experiment on what would happen if the government made it illegal for insurers to pay any medical bills less than $5,000. The result, as Goodman describes it, is a market that responds to price-conscious consumers by offering more convenience, information, and low-cost options.

His point, of course, is not that the government should place more limits on insurance, but rather that the government should place fewer limits on Health Savings Accounts in order to expand the number of consumers who take into account price when making health care decisions. Goodman wants to get the federal government out of specifying deductibles and coverage limits for plans with Health Savings Accounts. “What we need,” he says “are completely flexible accounts that can wrap around any health plan.”

It’s always a worthwhile exercise to think through how consumers would behave differently if they paid the bill out of their own pocket, because so much of health care policy is driven by the idea that prices should not affect a patient’s decisions about health care consumption. But as Goodman points out, consumers making decisions that take price into account is what drives the market to provide better care and more options.

Posted on 05/01/07 03:06 PM by Alex Adrianson

Seattle Times Reports on Its Own Environmental Efforts, Gets Story Wrong

Todd Myers, with Washington Policy Center, has a rundown of inaccurate claims made by environmental activists last month, including taking the Seattle Times to task for its account of how sawmill chips help fight global warming:

The Times notes that their newsprint is made from “sawmill chips” and that “No trees are harvested to make the newsprint.” What they mean is that no trees are harvested solely for the purpose of creating pulp. This, however, is akin to saying that no pigs were slaughtered to create sausage since the primary products were pork chops. Such spin would likely be chided on the front page of the paper. Chips are not a byproduct, but are part of the economics of timber harvesting. Companies price lumber and other products from trees assuming they can sell wood chips. They are not simply an incidental part of the calculation of forestry companies.

It is understandable why The Times would say this. They are appealing to common notions most recently expressed by Singer Sheryl Crow when she suggested people use only one square of toilet paper. By feeding the inaccurate, albeit common, notion that using wood and wood products hurts the planet, it makes it difficult to advocate policies that reduce carbon in the atmosphere.

Responsible timber harvesting is a good way to remove carbon from the atmosphere and store it in wood products. As trees grow they use CO2, store the carbon, and emit O2 as part of their growth. At some point, however, they begin to decay and emit carbon back into the atmosphere. Harvesting trees before they begin to emit carbon, stores carbon more permanently than simply letting trees decay.

Posted on 05/01/07 12:09 PM by Alex Adrianson

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