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InsiderOnline Blog: May 2010

Time for the Tenth

The Tenth Amendment to the Constitution states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” It means that other than a few specified prohibitions (states can’t coin money or erect trade barriers, for instance) states are free to conduct their own affairs. That understanding of the federal nature of our system has been subverted over the past 60 years, helping to ease the way for the overweening welfare state we have today. Reasserting the principles of the Tenth Amendment can help check that development. To find out more about the Tenth Amendment, see the Institute for Policy Innovation’s excellent “A Citizen’s Guide to the Tenth Amendment,” by Merrill Matthews and William Murchison.

Posted on 05/28/10 09:02 AM by Alex Adrianson

What’s a Young Person to Think?

It’s commencement season, always a prime opportunity for liberal chest thumpers! Imprimis Digital offers a good antidote: Victor Davis Hanson’s address to the Hillsdale Academy, which is a model K-12 school operated by Hillsdale College. This address comes from last May, but Hanson’s advice is if anything more relevant this year. Take a look:

Posted on 05/27/10 08:02 PM by Alex Adrianson

Crowdsourcing Transparency

The Pioneer Institute has just launched what looks like a cool contest. It’s asking those who live or work in one of 14 Massachusetts cities to poll their neighbors on three questions: What government information do you think people should have access to? In what format do you think this information should be delivered in? How do you think technology can be used to make government more transparent and accountable to citizens? Pioneer will give a $1,000 "Ultimate Citizen Award" to the individual or team that “captures the deepest and broadest insights possible.” Submissions end June 15; winner announced June 30. Somebody (other state-based think tanks?) might find this idea worth trying in other states, too.

Posted on 05/27/10 04:50 PM by Alex Adrianson

Supreme Court to Be Final Word on Tuition Tax Credits

Arizona’s school choice program may yet survive the misguided 10-year-old legal attack of the American Civil Liberties Union. Thanks to the Institute for Justice, the Supreme Court has decided to review the Ninth Circuit’s ruling that Arizona’s tuition tax credit program violates the First Amendment prohibition against laws “respecting an establishment of religion.”

The Ninth Circuit Court of Appeals reached that decision in spite of the fact that the Arizona law is entirely neutral with regard to religion. Arizona’s program gives tax credits for donations to organizations providing scholarships to private schools. For the past 13 years, the program has given many thousands of Arizona children the opportunity to attend a school of their choice. The law allows both secular and religious organizations to participate. But treating religious and non-religious organizations evenhandedly wasn’t good enough for the liberal Ninth Circuit. Based on statistics showing that a majority of the scholarships created by the program ended up helping students attend religiously affiliated schools, the Ninth Circuit decided that Arizona’s legislature had an illicit motive of advancing religion when it passed the law.

In its brief asking for Supreme Court review, the Institute for Justice pointed out that on four separate occasions the Court has already held that a law may have the effect of benefiting religious organizations as long as those benefits are the result of private choices and the law is neutral with regard to religion. Even the plaintiffs agreed that the Arizona law met those tests. Under Arizona’s program, scholarship-granting organizations with a religious affiliation can receive donations, but only if the donors choose to give to them. The Ninth Circuit’s method of basing its judgment on statistics on how such laws operate could lead to the absurd result that one state law could be ruled constitutional while an identical law in another state could be held unconstitutional depending on the choices made by those participating in the programs. Eight other states have similar tax-credit laws. [See also the Cato Institute’s amicus brief supporting the Arizona law.]

Posted on 05/26/10 07:22 PM by Alex Adrianson

What Were the Founders Thinking?

What is government itself but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.

That sublime passage from Federalist 51 is the essential statement of the need for constitutional checks and balances on government. But Publius had so much more to say, and now Anthony Peacock, professor of political science at Utah State University, has written a little guide called How to Read the Federalist Papers. Peacock’s slim but learned volume provides an overview of the major themes of The Federalist Papers, explaining how the natural rights philosophy of the Founders informed their drafting of the Constitution. The Constitution, and the philosophy behind it, are under assault again today, and Peacock’s book identifies an exemplary model for defending it.

The book can be downloaded, and is also available from The Heritage Foundation bookstore.

Posted on 05/25/10 05:58 PM by Alex Adrianson


A new outlet for pro-liberty activism launches today (May 25). offers citizens a variety of resources for getting informed and getting involved in the battle against big and growing government. Visitors to the site will find a series of videos featuring Robert George discussing America’s Founding principles, the text of the U.S. Constitution and the Declaration of Independence, recommended readings on liberty, and a daily discussion of hot issues. Be sure to check it out.

Posted on 05/25/10 12:17 PM by Alex Adrianson

Enhanced Rescission No Fix for Long-Term Budget Problems

Don’t expect the Obama administration’s embrace of “enhanced rescission” to be the solution to America’s long-term fiscal woes. According to the Government Accountability Office, Presidents have proposed $20 billion in rescissions since 1990 and Congress has approved just $6 billion of those proposed cuts, amounting to just 0.01 percent of all federal spending since that time. So what exactly is the enhancement? Unlike the process currently in place, Congress would have to vote the rescissions up or down. That might help, but keep in mind that the 2011 federal budget deficit is projected to be over $1 trillion. In order for rescissions to have an impact on a deficit of that size, proposing and then approving them would have to become much more of a habit along Pennsylvania Avenue. President Bush proposed no rescissions in his time in office, and President Obama has proposed none so far.

Plus, there’s the fact that entitlement growth is the real budget problem and that can’t be touched by rescissions. Here’s what that problem looks like graphically, from the 2010 Budget Chart Book:

And no, the health care overhaul hasn’t changed those projections. In fact, Medicare’s own actuary now says federal health care expenditures will go up by $251 billion over the next decade as a result of Obamacare.

Posted on 05/24/10 04:32 PM by Alex Adrianson

A Warning from the International Monetary Fund

[T]he IMF announced the United States now ranks second in terms of countries that risk financial calamity unless they reduce their structural deficits. The IMF predicts our public-sector debt for all governments will equal our total gross domestic product (GDP) in just five years unless we act immediately to cut deficits by an amount equal to 12 percent of the GDP. Even woeful Greece needs to cut its deficit by “only” 9 percent of its national output. [Links added to original.]

That’s Bill Beach, director of The Heritage Foundation’s Center for Data Analysis, describing the recent IMF report, “Navigating the Fiscal Challenges Ahead” (May 14). The source of our spending problem? Beach explains: “According to preliminary estimates by the Heritage Foundation’s Center for Data Analysis, the Index of Dependence on Government grew by 13.6 percent in 2009. That’s the largest single-year expansion in dependency-creating programs since 1962 – the year before Lyndon Johnson’s ‘Great Society’ launched.”

But haven’t we learned by now about the pitfalls of dependency? Yes, says Beach, but

… dependency-creating programs quickly morph into political assets that policymakers readily embrace. Voters tend to support politicians or political parties that “give” them higher incomes or subsidies for the essentials of life. However well-meaning policymakers were when they created these aid programs, these same programs quickly grow beyond their original mission. They become easy assets for politicians, but they carry huge social and economic liabilities for the nation. … Policymakers are loath to take the remedial action so obviously needed, principally because spending on these programs cannot be cut back without enormous political pain. That’s why the IMF is so concerned about America’s rapid run-up of debt ... and why every American should be concerned, as well. [“The Connection of Debt and Dependency,” Washington Times, May 20, 2010.]

Posted on 05/21/10 04:23 PM by Alex Adrianson

The First Post-American Presidency

Former U.S. Ambassador John Bolton assesses the first 15 months of the Obama administration’s foreign policy (program begins at about 3:11):  

Posted on 05/20/10 09:31 PM by Alex Adrianson

Cuba Fact of the Day

Cuba “is fourth only to China, Iran and Burma in the number of writers imprisoned in the country for peaceful expression of their opinions,” according to the report “Freedom of Expression in Cuba,” recently published by the Writers in Prison Committee of English PEN. By the way, today (May 20) is Cuba Solidarity Day. For perspective on Cuba see Heritage Foundation fellow Ray Walser’s post today at The Foundry.

Posted on 05/20/10 08:48 PM by Alex Adrianson

The Importance of Private Capital to Development

“Private capital flows were hard hit by the banking crisis in the U.S. and in other donor countries,” reports the Hudson Institute’s Index of Global Philanthropy and Remittances 2010. “These flows declined to $121 billion in 2008 from $325 billion in 2007.” But: “Although private capital flows declined, combined private flows were still higher than public flows from developed to developing countries. … [T]ogether the three private financial flows—philanthropy, remittances, and private capital investment—from all donor countries amounted to $355 billion in 2008, almost three times larger than [Official Development Assistance] alone.”

Posted on 05/20/10 07:58 PM by Alex Adrianson

Dean of Harvard Medical Not a Fan of Obamacare

Dr. Jeffrey Flier, Dean of the Harvard Medical School, has given Obamacare a failing grade. Here’s his recent talk at the Pioneer Institute:

Posted on 05/20/10 05:58 PM by Alex Adrianson

William F. Buckley’s Firing Line on DVD

One hundred and eight episodes of William F. Buckley’s Firing Line are now available on DVD from, thanks to the Hoover Institution’s remastering and digitizing the episodes from their original tapes. That figure includes 30 episodes released just this week, featuring guests such as Noam Chomsky, Billy Graham, Groucho Marx, Huey P. Newton, and Thomas Sowell.

Posted on 05/20/10 05:42 PM by Alex Adrianson

Race to the Top’s Bart Simpson Standard

It’s not exactly news that the federal No Child Left Behind program has encouraged the states to define proficiency downward in order to avoid triggering various federal sanctions. But judging from Education Next’s recent grading of state proficiency standards, the Obama administration’s Race to the Top program is no fix. Here’s the journal’s overall finding: “Every state, for both reading and math (with the exception of Massachusetts for math), deems more students ‘proficient’ on its own assessments than NAEP [the National Assessment of Educational Progress] does. The average difference is a startling 37 percentage points.”

But perhaps even more startling is that “Tennessee received an F and had the lowest standards of all states” yet was also one of the two winners in the first phase of the Race to the Top (RttT) competition. Education Next reports:

Based on its own tests and standards, the state claimed in 2009 that over 90 percent of its 4th-grade students were proficient in math, whereas NAEP tests revealed that only 28 percent were performing at a proficient level. Results in 4th-grade reading and at the 8th-grade level are much the same. … Delaware, the other RttT First Phase winner, also had below-average standards, for which we awarded a grade of C- and ranked it 36th of the 50 states and the District of Columbia. … Tennessee earned almost full marks (98 percent) on the section of the [Race to the Top] competition … devoted to “adopting standards and assessments,” even though its standards have remained extremely low ever since the federal accountability law took hold.

The Department of Education appears to have rewarded Tennessee not for raising its standards but for promising to raise its standards. Maybe it’s following the example of Bart Simpson, who once quipped: “I can’t promise I’ll try, but I’ll try to try.” [For more on trends in proficiency standards, see “State Standards Rising in Reading but Not in Math,” by Paul E. Peterson and Carlos Xabel Lastra-Anadón, Education Next, Fall 2010.]

Posted on 05/19/10 08:01 PM by Alex Adrianson

European Integration’s Inconvenient History

Two significant caches of documents relating to late Soviet history have been tragically ignored by Western journalists and researchers. So reports Claire Berlinski, whose casual mining of the documents shows that some might prefer the information to remain obscure. One such nugget comes from the reports of Vadim Zagladin, who was deputy chief of the Central Committee’s International Department until 1987 and then Mikhail Gorbachev’s advisor until 1991. “According to Zagladin’s reports,” writes Berlinski: 

Kenneth Coates, who from 1989 to 1998 was a British member of the European Parliament, approached Zagladin on January 9, 1990, to discuss what amounted to a gradual merger of the European Parliament and the Supreme Soviet. Coates, says Zagladin, explained that “creating an infrastructure of cooperation between the two parliament[s] would help … to isolate the rightists in the European Parliament (and in Europe), those who are interested in the USSR’s collapse.” Coates served as chair of the European Parliament’s Subcommittee on Human Rights from 1992 to 1994.

In Berlinski’s words: “Europe was taking advice about human rights from a man who had apparently wished to ‘isolate’ those interested in the USSR’s collapse and sought to extend Soviet influence in Europe … .”

The Zagladin documents are among a cache stolen by Pavel Stroilov from Mikhail Gorbachev’s foundation in 2003; another dissident, Vladimir Bukovsky, copied thousands of documents from the Russian state archives in 1992. Both sets of documents have been acknowledged as authentic; they are available but not easily accessed. Stroilov’s 50,000 documents exist primarily on his computer while Bukovsky’s copies are available in Russian only in an un-indexed, non-searchable format at

The problem, says Berlinski, is that no reputable library has shown interest in housing the materiel. That’s a shame because the documents appear to provide other tantalizing details about Soviet efforts to promote and guide the project of European integration. See Berlinski’s “A Hidden History of Evil,” (City Journal, Spring 2010) for a summary of what else the documents have revealed so far.

Update: Several historians have challenged Berlinski’s contention that the Stroilov and Bukovsky archives contain significant materiel not available in other public archives—in particular the Fond 89 collection published by the Hoover Institution in 2001 and the archives of the Gorbachev Foundation. In a rather lengthy response to a critical piece from Ron Radosh, Berlinski points to specialists she consulted who say that there are major omissions in those collections, stemming from efforts by Russian state security to block the release of sensitive materiel.

Posted on 05/18/10 04:45 PM by Alex Adrianson

Minnesota Town Erects Trade Barriers

The Founders gave to Congress the power to regulate interstate commerce because they wanted to prevent states from engaging in the sort of discriminatory trade restrictions that had helped ruin the national economy under the Articles of Confederation—i.e., they wanted to prevent trade wars between the states. The political leaders of Lake Elmo, Minnesota, missed that history lesson: In December last year, the city decided to start enforcing a long-dormant law prohibiting farmers from selling at their farms produce not grown within the city. One consequence of the law is that local farmers can no longer offer for sale Christmas trees or pumpkins that they have imported from out-of-state producers—not without facing 90 days in jail and a $1,000 fine. The city says the ordinance is designed to protect Lake Elmo’s rural character, but the farmers say the law is going to ruin their businesses. It’s not likely to help out-of-state farmers or local consumers, either! The Institute for Justice says this law is blatantly unconstitutional and has taken up the case on behalf of the farmers. Here’s a video IJ has produced about the case:

Posted on 05/18/10 01:36 PM by Alex Adrianson

EPA Propaganda Now Safe for Public Consumption

… thanks to

Posted on 05/18/10 11:26 AM by Alex Adrianson

Higher Tax Rates Won’t Fix Deficits

The Congressional Budget Office says the U.S. net national debt will reach 90 percent of GDP by 2020. That level is bad enough, but consider how the CBO may be understating the problem. Tax rates go up and down, but federal receipts almost never amount to more than about 18.3 percent of gross domestic product. The CBO’s projections assume they do. Here’s what the relationship looks like historically:

This graphic relationship is called Hauser’s Law, about which David Ranson writes in the Wall Street Journal (May 17). The Heritage Foundation’s Budget Chart Book has a chart making a similar point, but looking just at revenue from the individual income tax.

As this chart shows, higher tax rates do not appreciably increase tax revenues as a share of the economy. High taxes can, of course, decrease the size of an economy. The explanation for these relationships should be familiar to anyone who understands the Laffer Curve: Higher taxes incentivize people to spend more time on leisure instead of creating wealth; they also encourage people to shift their incomes into non-taxable forms. As Ranson notes, the CBO assumes federal revenues exceed 18.3 percent of GDP as early as 2013 (which also unrealistically implies that the economy is at full employment by then). If history is any guide, we should expect current policies to yield a net national debt higher than 90 percent of GDP in 2020—even closer to the current Greek ratio of 115 percent of GDP.

Posted on 05/17/10 05:40 PM by Alex Adrianson

As Long As You Pay People for Being Unemployed, You Will Have Unemployed People

Even though Michigan has the highest unemployment rate in the nation (14.1 percent as of March), landscaping firms in the state are having a difficult time finding seasonal workers. The Detroit News reports that some unemployed applicants are saying “no thanks” to job offers because they’d rather continue collecting unemployment benefits. Reports the News:

The average landscape worker earns about $12 per hour, according to the Michigan Department of Labor and Economic Growth. A full-time landscaping employee would make $225 more a week working than from an unemployment check of $255. But after federal and state taxes are deducted, a full-time landscaper would earn $350 a week, or $95 more than a jobless check. ... The jobless in Michigan are collecting for a longer time – an average of 19.4 weeks last year, up from 15 weeks in 2008. State benefits last for up to 26 weeks. The unemployed can then apply for extended federal benefits that increase the total time on the public dole up to a maximum of 99 weeks. The federal jobless benefits extension “is the most generous safety net we’ve ever offered nationally,” said David Littmann, senior economist of the Mackinac Center for Public Policy, a free-market-oriented research group in Midland. … One former landscaper, who has been on unemployment for a year, said he will search for work when the benefits expire, but he estimates he earns about $50 to $60 less a week than he would if he were working. “It’s crazy,” he said. “They keep doing all of these extensions.”

Posted on 05/14/10 12:23 PM by Alex Adrianson

White Castle’s Warning on Obamacare

If projections from mini-hamburger monger White Castle are any guide, Obamacare is going to be bad news for low-income workers. One provision of the new health care law requires that employer-provided health insurance charge premiums no higher than 9.5 percent of an employee’s household income. Employers face a $3,000 per-employee penalty for failing to abide by that stricture (as if employers can easily know what their employees’ household incomes are!). White Castle recently analyzed this provision and calculated that it would reduce the company’s net income by 55 percent. White Castle official Jamie Richardson said: “Effectively cutting our net income in half would have [a] devastating impact on the business – cutting future expansion and more job creation at least in half.  Sadly, it makes it difficult to justify growing where jobs are needed most – in lower income areas.” [“ObamaCare’s War on White Castle Jobs,” John Boehner, GOP Leader Blog, May 11, 2010.]

According to a study by the consulting firm Mercer, as many as 38 percent of employers are at risk of violating this provision. And companies with lots of low-income workers—the ones who most need their jobs—are more likely to trigger the penalty. Laws that makes it more expensive to employ people can be expected to reduce employment. [“Health Care’s Impact on the Low-Skilled Worker,” by Diana Furchtgott-Roth,, May 6, 2010.]

Posted on 05/14/10 11:09 AM by Alex Adrianson

Crowd Out!

Does government spending spur economic activity or does it crowd-out private investment? A new study by three Harvard economists has found an innovative way to assess that question, and they do find a crowd-out effect. Instead of examining the impact of increases in federal spending implemented in response to the business cycle—an approach that is likely to confuse cause and effect—the study authors examine what happens at the state level following changes in the chairmanships of congressional committees with significant power over federal earmarks. Steve Malanga writes about the study at Real Clear Markets and summarizes it this way:

Focusing on 232 instances over the last 42 years where senators or representatives have assumed the chair of a major committee, the economists found, not surprisingly, a big increase in earmark spending: an average gain of 40 percent to 50 percent in pork in the new chair’s state, and a 10 percent gain in total federal spending. That increase, which materializes almost immediately, amounted to $51 million in new annual earmarks on average and continued throughout the new chair’s tenure, only to disappear when he lost his position.

... Drawing on a database of more than 16,000 businesses, the study found that in the year after this big gain in earmarks, firms in a state cut back on capital expenditures by 15 percent, or $39 million, and research and development by 7 percent to 12 percent, or $34 million on average. Sales declined by 15 percent, and employment slumped by anywhere from 3 percent to 15 percent. The impact was most intense on firms that have much of their operations in a state and can’t easily shift production elsewhere. The effect was also greater when the economy is good and unemployment is low, for a reason that should be obvious by now: the surge in government funds, an economic shock, most likely set off an intense competition for workers and other resources, like real estate, among firms.

[See “Do Powerful Politicians Cause Corporate Downsizing?” by Lauren Cohen, Joshua Coval, and Christopher Malloy.]

Posted on 05/12/10 05:21 PM by Alex Adrianson

Renewable Energy Costs More

A nationwide renewable energy standard, such as Congress is currently considering, would increase energy prices for households by about 36 percent by the year 2035, according to a new report from The Heritage Foundation’s Center for Data Analysis.

Wind power is the cheapest source of renewable energy, but it is still much more expensive than coal or natural gas. Also, making greater use of wind power would require new transmission lines, plus additional backup generation to offset the unreliability of wind power (it doesn’t always blow!). Taking all these things into account—as well as the fact that higher prices induce consumers to take cost-saving steps—Heritage’s CDA projects that relying on an ever increasing portion of wind power over time comes with substantial costs. In addition to higher household prices, industrial users would face price increases of 60 percent by 2035, even while cutting energy use. “The net impact in 2035,” says the CDA report, “is that industrial users will pay out 21 percent more dollars for 23 percent less electricity than if there were no [renewable energy standard].”

The CDA report also calculates that the economic impacts include $5.2 trillion in lost gross domestic product by 2035 and job losses that reach 1.3 million in 2032. [“A Renewable Electricity Standard: What It Will Really Cost Americans,” by David Kreutzer, et al., The Heritage Foundation, May 5, 2010.]

Posted on 05/12/10 03:43 PM by Alex Adrianson

Attention Witty Writers: Bastiat Prize Now Accepting Submissions

The International Policy Network is now accepting submissions for its annual Bastiat Prize for Journalism.

The prize is named after Frederic Bastiat, a 19th century Frenchman famed for his acerbic writings revealing the folly of statist economic policies. A good example is his “Candlemakers Petition,” which asked the French Chamber of Deputies to protect the commerce of “Manufacturers of Candles, Tapers, Lanterns, sticks, Street Lamps, Snuffers, and Extinguishers,” and “Producers of Tallow, Oil, Resin, Alcohol” by passing “a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull’s-eyes, deadlights, and blinds — in short, all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses.”

The Bastiat Prize recognizes writers “whose published articles eloquently and wittily explain, promote and defend the principles and institutions of the free society.” The contest is open to writers anywhere in the world. First prize wins $10,000. The deadline for submission is June 30.

Posted on 05/12/10 01:23 PM by Alex Adrianson

Kagan’s Judicial Hero Holds a “World Record in Judicial Hubris”

Aharon Barak is Elena Kagan’s judicial hero: “He is the judge who has best advanced democracy, human rights, the rule of law, and justice,” Kagan has said. Barak is a retired Chief Justice of the Israeli Supreme Court. Richard Posner describes Barak this way: “I have my differences with Robert Bork, but when he remarked, in a review of The Judge in a Democracy, that Barak ‘establishes a world record for judicial hubris,’ he came very near the truth.” And, from Charmain Yoest at Human Events, here is a summary of Barak’s record of judicial activism:

• Barak held that the “basic laws” passed by the Knesset, Israel’s parliament, could never be repealed.
• He claimed “the right to judge the deployment of troops in wartime” and that a court can countermand military orders.
• He argued that judges “cannot be removed by the legislature but only by other judges.”
• He “takes for granted that judges have inherent authority to override statutes.”
• Barak converted the term “separation of powers” into the proposition that “the executive and legislative branches are to have no degree of control over the judicial branch.”
• He also argued that “any government action that is “unreasonable” is illegal and that in the name of “human dignity” a court can compel the government to alleviate homelessness and poverty.

Posted on 05/11/10 05:35 PM by Alex Adrianson

The Greek Path

Under President Obama’s budgets, by 2020 the U.S. gross debt will reach 123 percent of U.S. gross domestic product—or only 2 percentage points less than the gross debt/GDP ratio of a certain East European country that just got a $146 billion bailout in order to avoid defaulting on its debts. [“A Choice for the Condemned,” by Ernest S. Christian and Gary A. Robbins, The Washington Times, May 10, 2010.]

Posted on 05/11/10 11:32 AM by Alex Adrianson

Does the Constitution Protect Free Trade Between the States?

Originalism is an important antidote to the progressive project to rewrite the Constitution through judicial interpretation. But in the latest issue of National Review, Michael Greve argues that the version of originalism espoused by justices Antonin Scalia and Clarence Thomas is hostile toward doctrines that are essential for making the structure of the Constitution work—in particular the dormant Commerce Clause and federal supremacy over matters relating to interstate commerce.

As Greve sees it, “hidebound originalism” has eviscerated the Court’s role in policing state interventions, allowing commerce to be exposed to “relentless exploitation by trial lawyers who shop for hellhole jurisdictions, by attorneys general and treasurers who have become rainmakers for their states, and by crusading state lawmakers who inflict costly global-warming experiments on the entire nation.” Greve, a scholar at the American Enterprise Institute, concludes:

Congress is built to promote interest-group politics and parochial exploitation. … A jurisprudence that would “let Commerce struggle for congressional action to make it free” has already pronounced it dead, as Justice Robert Jackson wrote in a dormant-Commerce Clause case in 1941.

[Much to ponder here: “Our Defunct Commercial Constitution,” by Michael Greve, National Review (free at, May 17, 2010.]

Posted on 05/10/10 06:50 PM by Alex Adrianson

If We Don’t Know How Many People There Are, How Will We Know How Many iPads We Need?

Those Census ads—the ones that ask: “If we don’t know how many people there are, how will we know how many buses we need?”—reveal an important difference between how markets work and how government works. Here’s the quick lesson in econ 101 from Isaac Morehouse at The Freeman:

Has your local grocery store ever been out of food? Do you fear that the store might miscalculate the amount of food needed, leaving residents hungry? Have you ever received a census from your grocer? Has the grocer ever run ads claiming that without your household survey, he won’t know how much food to stock? … Markets manage to deliver billions of incredibly specialized goods to every corner of the globe with amazing efficiency every day without census forms. They use an ingenious process called the price system. Unlike the census, the price system in a free market is not the product of human design, but of millions of human actions, spontaneously coordinating to signal producers, consumers, investors, shippers, shelf-stockers, and all the other players in the market what decisions they should make to best achieve their objectives. The free play of millions of individuals, each seeking to better their situation, results in awe-inspiring cooperation and organization.

Posted on 05/10/10 05:47 PM by Alex Adrianson

Who Politicized the Court?

Many commentators believe that Elena Kagan’s relative lack of a “paper trail” of legal writings make her a safe pick to fill the Supreme Court vacancy. Isn’t that a sad commentary on the judicial confirmation process? Robert Bork, who was himself the subject of a particularly vicious Supreme Court nomination battle in 1987, explains how things got this way:

Half a century ago, the Court served notice that it was open to claims that have no basis in the Constitution, thus inviting litigation which, since no law was available, could only be decided on grounds of political philosophy or social sympathy. But the Court is a unique political branch because its decisions are accorded finality. The Founders, having no idea what a court could become and believing, as did Hamilton, that the judiciary’s powers would be limited to enforcing the policies of the legislative and executive, did not provide the checks and balances they devised for the political branches.

Thus, today’s judiciary, claiming both omni-competence and finality, has made control of the Court the ultimate political prize and its decisions the most potent weapons in our ongoing political and cultural struggles. So long as a majority of the justices persist in their present behavior, so long will confirmation hearings be unedifying power struggles played out on national television. [“Keeping a Republic, Overcoming the Corrupted Judiciary,” The Heritage Foundation, February 24, 2010.]

Posted on 05/10/10 05:05 PM by Alex Adrianson

Meese on Kagan

Ed Meese III on the nomination of Elena Kagan to the Supreme Court:

First and foremost, any nominee to a lifetime appointment to the United States Supreme Court must demonstrate a thorough fidelity to apply the Constitution as it was written, rather than as they would like to re-write it. Given Solicitor General Kagan’s complete lack of judicial experience, and, for that matter, very limited litigation experience, Senators must not be rushed in their deliberative process. Because they have no prior judicial opinions to look to, Senators must conduct a more searching inquiry to determine if Kagan will decide cases based upon what is required by the Constitution as it is actually written, or whether she will rule based upon her own policy preferences.

Though Ms. Kagan has not written extensively on the role of a judge, the little she has written is troubling. In a law review article, she expressed agreement with the idea that the Court primarily exists to look out for the “despised and disadvantaged.” The problem with this view—which sounds remarkably similar to President Obama’s frequent appeals to judges ruling on grounds other than law–is that it allows judges to favor whichever particular client they view as “despised and disadvantaged.” The judiciary is not to favor any one particular group, but to secure justice equally for all through impartial application of the Constitution and laws. Senators should vigorously question Ms. Kagan about such statements to determine whether she is truly committed to the rule of law. Nothing less should be expected from anyone appointed to a life-tenured position as one of the final arbiters of justice in our country.

Posted on 05/10/10 02:56 PM by Alex Adrianson

Offshore Drilling: Costs and Benefits

Will the accident involving BP’s Deepwater Horizon drilling rig derail the Obama administration’s plans to relax restrictions on offshore oil drilling? It depends on whether pictures of oily birds matter more than realistic assessments of the costs and benefits of extracting the oil.  

Reason’s science correspondent Ronald Bailey reviews some cost-benefit calculations. In particular, he notes a recent cost-benefit analysis by Georgetown University economist Robert Hahn and Milken Institute economist Peter Passell. That analysis found that if the price of oil is $50 per barrel, then 10 billion barrels could be recovered from the areas of the outer continental shelf that are currently off-limits. The benefits of having that additional oil would exceed the costs—including the costs of local environmental damage, more greenhouse gasses, greater traffic congestion, and more traffic accidents—by about $323 billion. At a price of $100 per barrel of oil, an additional 11.5 billion barrels are recoverable, and the benefits of having that oil exceed costs by about $967 billion.

Bailey also uses the EPA’s own Basic Oil Spill Cost Estimation Model to calculate a worst case scenario for the oil now gushing from BP’s well. In that scenario, says Bailey, the environmental damage will be about $2.2 billion, or about the same as the Exxon Valdez oil spill, which also incurred an additional $2.3 billion in legal costs and damage payments.

So it would take quite a few of these once-every-two-decade accidents to really make the case that offshore drilling is a bad idea.

Posted on 05/07/10 12:35 PM by Alex Adrianson

4th International Conference on Climate Change Coming Up

The Heartland Institute’s International Conference on Climate Change series has become an important venue for scientists sharing research that does not quite fit with the alarmist consensus on global warming. It’s also a good place to get realistic estimates of both the costs of global warming and the costs of proposed global warming policies—things that probably should matter to those making policy.

The 4th International Conference on Climate Change will be held May 16-18 in Chicago, Illinois. The conference speakers include climatologists Richard Lindzen of MIT, Patrick Michaels of the Cato Institute, S. Fred Singer of the Science and Environmental Policy Project, and Roy Spencer of the University of Alabama-Huntsville; astro-physicist Willie Soon; Steve McIntyre, whose investigations of the infamous hockey-stick graph played a central role in the climategate e-mails; and Anthony Watts, meteorologist and creator of the Web site, a database of surveys on the reliability of temperature stations in North America.

Posted on 05/07/10 11:34 AM by Alex Adrianson

Will Killing Physician-Owned Hospitals Improve Health Care?

The health care overhaul that became law at the end of March targets physician-owned hospitals with a number of new restrictions, including an immediate ban on expansion. As a result, reports Robert Bluey, hospitals such as McBride Orthopedic Hospital in Oklahoma City are canceling expansion plans.

Two new operating rooms and a four-bed intensive-care unit were part of a multimillion-dollar expansion project that promised to bring competition and more health care choices to the community. But once President Obama's signature was dry on the 2,409-page Patient Protection and Affordable Care Act, so, too, was the McBride project. … “We pulled the plug when the law was signed,” McBride Chief Executive Mark Galliart said. “We were ready to break ground. We had everything approved by the state. We had the construction agreement in place. We were going to meet our timeline until the legislation passed.”

And, reports Bluey: “Within days of enactment of the new law, developers across the country nixed plans for 24 new physician-owned hospitals under construction. It will be a struggle for an additional 47 new such hospitals under construction to meet an Obamacare-imposed deadline of Dec. 31 to be finished and have their Medicare certification.”

How is it that a law that’s supposed to promote greater access to health care ends up preventing hospital expansion? The answer is that community hospitals and their lobbyists convinced Congress that physician-owned hospitals compete unfairly and need to be reined in. Physician owners, say the community hospitals, can self-refer and thus cherry-pick the most profitable patients. Some studies show, for instance, that Medicaid patients are less likely to be referred to a physician-owned hospital than to a community hospital. But that would seem to be an argument for fixing Medicaid reimbursement rates, not for stifling a new business model. In a similar vein, the Medicare Payment Advisory Commission looked at this issue in 2005 and recommended that Medicare’s system of reimbursement be updated to prevent the sort of disparities in payment that encourage cherry picking.

In any case, Heritage fellow Ashok Roy reviewed the literature on specialty hospitals (which tend to be physician-owned) a couple of years ago, and found little reason to think these hospitals are anything but beneficial for patients. Among the findings Roy highlights is the fact that specialty hospitals have higher rates of patient satisfaction and lower rates of mortality than community hospitals.

Posted on 05/06/10 07:09 PM by Alex Adrianson

Charles Murray: Choice Advocates Should Stop Focusing on Standardized Test Scores

Charles Murray is one school choice advocate who isn’t particularly disappointed with the recent evaluation of Milwaukee’s school choice program. That evaluation, conducted by the School Choice Demonstration Project, found that pupils in Milwaukee’s school choice programs generally did not outperform their public school counterparts, but had achievement growth rates that were only comparable. Here’s why Murray isn’t disappointed:

If my fellow supporters of charter schools and vouchers can finally be pushed off their obsession with test scores, maybe we can focus on the real reason that school choice is a good idea. Schools differ in what they teach and how they teach it, and parents care deeply about both, regardless of whether test scores rise.

Here’s an illustration. The day after the Milwaukee results were released, I learned that parents in the Maryland county where I live are trying to start a charter school that will offer a highly traditional curriculum long on history, science, foreign languages, classic literature, mathematics and English composition, taught with structure and discipline. This would give parents a choice radically different from the progressive curriculum used in the county’s other public schools.

I suppose that test scores might prove that such a charter school is “better” than ordinary public schools, if the test were filled with questions about things like gerunds and subjunctive clauses, the three most important events of 1776, and what Occam’s razor means. But those subjects aren’t covered by standardized reading and math tests. For this reason, I fully expect that students at such a charter school would do little better on Maryland’s standardized tests than comparably smart students in the ordinary public schools.

And yet, knowing that, I would still send my own children to that charter school in a heartbeat. They would be taught the content that I think they need to learn, in a manner that I consider appropriate.

Posted on 05/06/10 10:27 AM by Alex Adrianson

Time to Cut Corporate Taxes

The effective corporate tax rate in the United States is now 35 percent, the highest rate of any OECD country, according Duanjie Chen and Jack Mintz. Their calculations, presented in a new paper for the Cato Institute, put the U.S. rate 15.5 percentage points higher than the OECD average. The effective tax rate reflects actual taxes paid and thus differs from the statutory rate (about 40 percent in the United States) because it takes account of things like depreciation deductions, inventory allowances, and interest deductions.

The United States is bucking an international trend, say Chen and Mintz, as most major countries have lowered their corporate taxes in order to attract more investment:

Of the 30 nations in the Organization for Economic Cooperation and Development, 27 cut their general corporate income tax rates since 2000, with an average cut of more than 7 percentage points. Among the 50 other nations examined here, 28 reduced their corporate tax rates, with an average cut also of about 7 percentage points. … During the 1980s, the United States enjoyed larger direct investment inflows than outflows, but during the 1990s and 2000s, the situation reversed and outflows became larger than inflows. Both tax and non-tax factors probably caused this reversal, but it does not help that the United States is near the top of the 80 nations in [effective corporate tax rate]. [Internal citations omitted.]

Chen and Mintz suggest that the U.S. lower its corporate tax rate so that the combined federal-state rate is no higher than 25 percent. This rate would likely benefit the government as well as the economy, since many empirical studies have found 25 percent to be the revenue-maximizing level of corporate taxation.

Posted on 05/05/10 03:17 PM by Alex Adrianson

Young Professionals: Explore Ideas with AEI Scholars this Summer

Young conservative professionals in Washington, D.C. should take note of what looks like an interesting program offered by the American Enterprise Institute—the 2010 American Enterprise Summer Institute.

This is the first year for the program, which consists of nine symposia held throughout June and July. Among the sessions: a trip to Gettysburg Battlefield and discussion of military strategy with Gary Schmitt, a screening of The Godfather and a discussion of the film with Robert Kagan, and a conversation with Jonah Goldberg. The application deadline is May 14.

Posted on 05/05/10 01:29 PM by Alex Adrianson

Four Questions: Lee Edwards on William F. Buckley Jr.

Lee Edwards’ new book, William F. Buckley Jr.: The Maker of a Movement, has just been published by ISI Books. We asked Edwards a few questions:

InisderOnline: You describe this 210-page volume as an intellectual rather than a definitive biography. What do you want readers learn about Buckley from this book?

Lee Edwards: As brilliant as Bill Buckley was—and he was one of the most brilliant men of his generation—he listened to and learned from those around him. The four intellectuals who most influenced his political thinking were Albert Jay Nock, a radical libertarian; Willmoore Kendall, a conservative scholar and expert on John Locke and the Founding; Whittaker Chambers, the former communist and Soviet spy who became an eloquent man of the Right; and James Burnham, an apostle of realpolitik in both foreign and domestic policy.

IO: One thing you chronicle very well is Buckley’s role in creating a more cohesive conservative opposition out of diverse and sometimes fractious voices. Was acting as a kind of arbiter of ideas Buckley’s most important contribution to conservatism?

LE: From the founding of National Review until the end of his life, Bill Buckley sought to bring together the different strains of conservatism so as to create and then sustain a national intellectual as well as political movement—he was a master fusionist.

IO: What are the prospects for Buckleyite fusionism without William F. Buckley?

LE: Bill Buckley was better at fusing than almost any one else, but since successful politics is addition rather than subtraction, other fusionists will come to the fore and are already here. The challenge is not to compromise your principles while seeking to balance the ideal and the pragmatic.

IO: You note some of Buckley’s best lines in sparring with liberals. Do you have a favorite funny Buckley quote?

LE: There are so many but I have suggested that Bill Buckley could be called the “patron saint” of the Tea Party Movement because of this comment, delivered during a debate at Harvard University: “I would rather be governed by the first two thousand names in the Boston telephone directory than the Harvard faculty.”

Posted on 05/04/10 05:34 PM by Alex Adrianson

There’s a Conservative Awakening Going On

… says Ted Cruz at Resource Bank. And Cruz, former Solicitor General for Texas, also has some ideas on what awakened conservatives should do now:

Posted on 05/04/10 12:19 PM by Alex Adrianson

Get Your Portable Library of Liberty

Over a thousand classic texts on individual liberty are now available on one DVD from the Liberty Fund. The Portable Library of Liberty is a selection from the Liberty Fund’s larger Online Library of Liberty. In addition to 1,002 full text titles in EBook PDF format, the DVD contains 36 hours of MP3 interviews with classical liberal political philosophers and economists and lectures on the thought of Friedrich Hayek. The DVD also contains a selection from the Library’s Quotations about Liberty and Power. You can request a complimentary copy by e-mailing the Liberty Fund; include your mailing address and indicate your preferred browser (Firefox/Safari or IE8).

Posted on 05/04/10 12:03 PM by Alex Adrianson

The Capital Gains Tax Encourages People to Spend Now Instead of Saving for the Future

The Obama administration has proposed a one-third increase in the capital gains tax rate. But there’s an easy way to avoid the capital gains tax altogether: spend all your income and don’t invest. That would not be good for the economy though. Dan Mitchell elaborates and identifies several other reasons why the correct capital gains tax rate is really zero:

Posted on 05/03/10 11:55 AM by Alex Adrianson

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