• “European Levels of Taxation: Barack Obama’s Tax Plan,” by Rea S. Hederman, Jr., and Patrick Tyrell, The Heritage Foundation, June 26, 2008.
• “An Individual Right Rekindled,” by Andrew Grossman, Human Events, June 26, 2008.
• “European Levels of Taxation: Barack Obama’s Tax Plan,” by Rea S. Hederman, Jr., and Patrick Tyrell, The Heritage Foundation, June 26, 2008.
• “An Individual Right Rekindled,” by Andrew Grossman, Human Events, June 26, 2008.
This week, the Environmental Protection Agency will likely take a step toward implementing by regulation what Congress chose not to implement by legislation.
Just weeks ago, Congress considered but ultimately decided not to vote on a plan to combat global warming by regulating greenhouse gas emissions. The stumbling block was the anticipated economic costs of such a plan. Putting a cap on emissions would almost certainly amount to a cap on the use of energy, which means less economic activity, slower income growth, and fewer new jobs. According to The Heritage Foundation’s David Kreutzer, the economic impact of that plan would have been equivalent to getting hit by 35 hurricanes per year. If politicians don’t like getting blamed for the aftermath of a hurricane, you can imagine how keen they might be to avoid blame for causing the economic equivalent of 35 of them per year.
But this week the EPA is expected to release a legal roadmap for regulating greenhouse gases under the Clean Air Act. This move will be the latest episode in a legal battle that began in 2003 when EPA announced it would not regulate greenhouse gases under the Clean Air Act. The EPA’s position at that time was that carbon dioxide and other greenhouse gases were not pollutants as understood by the Clean Air Act.
The Supreme Court’s decision can certainly be questioned, but if the EPA does decide to regulate greenhouse gas emissions, then the blame for imposing economic costs entirely out of proportion to any environmental benefit will belong to Congress. Under the Clean Air Act, the EPA may not consider costs in devising regulations on air pollution. But that’s not even the biggest problem. The biggest problem is that through this law Congress has delegated what is a legislative function to a non-elected body. Important policymaking is thus being done outside the ambit of democratic accountability.
This problem is not new, but if the EPA does put forth the anticipated plan, it will be one of the more glaring examples of a regulatory end-run around democracy.
Some events that caught our eye:
• ASSESS North Korea’s commitment to coming clean on its nuclear facilities. The Heritage Foundation hosts a panel looking at whether the Six Party Talks are making progress.
• EXAMINE the causes of today’s food crisis. The American Enterprise Institute hosts a discussion on whether Thomas Malthus’s predictions of inescapable food shortages are coming true.
• TAKE a look at India’s economic prospects. The Cato Institute hosts author Arvind Panagariya.
• FIND OUT what the Second Amendment means today. The Independent Institute hosts author Stephen Halbrook.
• WITNESS the unveiling of the first important public monument to Adam Smith. Thanks to the efforts of the Adam Smith Institute, the author of The Wealth of Nations receives the long-overdue recognition of a public monument in
• SAY “Happy Birthday America!” and celebrate with fellow conservatives at the National Conservative Fourth of July Soirée.
For more events, see InsiderOnline’s Conservative Calendar.
Our government should both protect us from terrorism and respect our civil liberties. … The growth of Islam in the United Kingdom is presenting new challenges to British society. … One can learn much about leadership by studying George Washington. … How to manage used nuclear fuel is a key question for the nuclear power industry. … Actuarial data can help us evaluate health care reform ideas.
Have you committed a federal crime lately? Don’t be so sure.
The Washington Post today affords further evidence of the nation’s declining math achievement.
There’s one group of District residents absolutely unfazed by today’s U.S. Supreme Court ruling shooting down the District’s strict handgun ban: the dudes who have been blowing away their fellow citizens with abandon since the law was put on the books 32 years ago.
Operating under the notion that it’s better to beg forgiveness than to ask permission, our shooters long ago decided not to wait for the high court’s thoughts on the matter. They simply arrogated to themselves the right to keep and bear arms and, with that right, license to shoot and kill, with impunity, whatever and whenever the evil spirits moved them.
The record will show that our home-grown shooters have blown through the city’s so-called strict handgun ban like John Riggins going up the middle. Over the past 20 years, there have been more than 6,500 homicides in the nation’s capital, most committed with firearms, predominantly handguns. In 1976, the year the ban was put in place, the District had 135 gun-related murders, according to CNN. Last year, the number reached 143. Thus far this year, we’ve had 85 murders.
Keep in mind that the key question before the Supreme Court was whether the Constitution allows government to enact a complete ban on citizen gun ownership—not whether such a ban has been effective at reducing gun violence. Fortunately, the checks against government power created by the Constitution also turn out to be good policy. If King really wanted to tell the full story of mayhem in our nation’s capital, he should have consulted the work of researcher John Lott. Lott has documented how banning guns in D.C. has led to more gun deaths:
’s ban went into effect in early 1977, but since it started there has been only one year (1985) when its murder rate fell below what it was in 1976. Murder rates were falling before the ban and rose afterward. In the five years before the ban, the murder rate fell from 37 to 27 murders per 100,000 people. In the five years after it went into effect, the rate rose back up to 35. Washington
D.C.’s murder rate also rose dramatically relative to other cities. In the 29 years that we have data after the ban, D. C.’s murder rate ranked first or second among the largest 50
cities for 15 years. In another four years, it ranked fourth. By contrast, in 1976, its murder rate ranked 15th. U. S.
The explanation is simple: “Everyone wants to take guns from criminals, but banning guns ends up meaning only criminals, not law-abiding citizens, have them.” And if criminals know that law abiding citizens don’t have guns, then they have less reason to fear perpetrating a crime against them. The Supreme Court’s decision will swing things back in favor of the law abiding citizen. It’s a result that should be cheered by those who care about reducing gun violence.
In case you haven’t read or watched any news today, this is a great day for freedom. The Supreme Court struck down the
Gun control advocates have held the view that the prefatory clause of the Second Amendment—“A Well regulated Militia, being necessary to the security of a free State …”—implies that the Founders intended to connect the right to service in a militia. Writing for the court, Justice Antonin Scalia rejected that view, holding that while the prefatory clause identifies a reason for the right, it does not narrow the scope of that right.
The opinion: Heller v. District of Columbia.
Josh of Josh Reviews Everything has calculated the inflation rate in Zimbabwe: 430,000,000,000,000,000,000,000,000,000,000,000,000 percent per year. Between last Friday and Monday, when the opposition party MDC withdrew from upcoming elections, the U.S. dollar doubled against
Hat tip: Adam Smith Institute.
An article today in Roll Call provides a nice snapshot of how Washington, D.C., works. The article begins this way:
After 18 months in the majority and a series of unsuccessful outreach efforts to the business community, Senate Majority Leader Harry Reid (D-Nev.) has lost patience with Republican dominance on
K Streetand started a systematic campaign to force a dramatic realignment backed with threats of a hostile environment on Capitol Hill.
It seems Reid wants business lobbyists to hire more Democrats, or he won’t do things for them. Imagine that: a politician demanding tribute in exchange for legislative consideration. Reformers worry about the influence of money on politics, but the problem is the other way around. Businesses hire lobbyists to protect them from government doing things to them.
When our politicians feel they can act like the Duke of Parma, surely we’ve given them too much power.
Obama’s motivations aside, his suggestion that the tens of thousands of people who are voluntarily contributing to his campaign are demonstrating a better model is absolutely correct. People should contribute voluntarily to the candidates they believe in, and those candidates should be free to raise and spend as much money as the market will bear. That is a much superior model to the status quo, wherein the government collects, distributes, and ultimately limits the means of free speech in what is arguably among the most important elections in the world.
Twenty-two states have so watered down their standards as to make it impossible to judge whether student academic achievement has been improving in the six years since the federal No Child Left Behind program was created. That’s one finding of a new report by the Center on Education Policy—though it’s not the finding the report’s authors have been marketing to the press. Here’s how the Washington Post reports the story:
Students are performing better on state reading and math tests since enactment of the landmark No Child Left Behind law six years ago, according to an independent study released yesterday.
That account seems to support the view that the federal government has helped improve the nation’s K-12 public schools. Under NCLB, federal education aid to the states comes with the requirement that schools show yearly progress on improving student’s math and reading scores.
But, as Neal McCluskey notes at Cato-at-Liberty, a more accurate statement would be that NCLB may or may not have improved public schools in 28 states, while encouraging 22 other states to water down their standards. McCluskey writes:
… the report looked primarily at state tests, and only about 28 states had sufficiently consistent data to do meaningful score analyses. The other 22 had changed their testing in so substantial a way since NCLB’s passage that not even three years of consistent results could be strung together. Which is the biggest non-finding finding of the report: NCLB has instigated so much test engineering — often to make assessments easier — that nearly half of all states have no useful long-term data. And don’t automatically assume that the other 28 haven’t changed things: the report itself notes that they could have made questions easier or harder, changed relative weights of questions, and made other, more subtle changes to their tests.
There’s no “control group” unaffected by NCLB against whom to compare students “treated” by the law, no ability to tease out the effects of NCLB versus other reforms, etc.
If 44 percent of states do the exact opposite of what a federal program aims to have them do, is that really a sign of success? We should ask: If those states didn’t feel the need to game the system to get more federal money, would they perhaps be more responsive to their own citizens who surely want good schools and high standards for their own children?
The House Appropriations Committee will soon vote on whether to continue funding the D.C. Opportunity Scholarship Program, which provides 1,900 students with vouchers worth up to $7,500 to attend a private school of their choice. Some members of Congress, and D.C.’s Delegate Eleanor Holmes Norton, are pushing to have the program eliminated.
In a recent Heritage paper, Shanea Watkins points to a recent Department of Education assessment of the program. DOE finds that students who received vouchers scored better on reading tests than students who had applied for the program but did not receive a voucher.
Watkins notes that while these increases are statistically insignificant, they are nevertheless encouraging. Some subgroups in particular achieved significant positive gains in reading achievement.
Critics might argue that since the differences are statistically insignificant, the study provides no evidence supporting the continuation of the program. But since the study shows, at worst, that the program doesn’t do any worse than D.C.'s public schools, why eliminate the program? The vouchers after all, cost taxpayers only $7,500 each, while public schools spend almost twice that much per pupil. Watkins points out that numerous assessments of other school choice programs have failed to find statistically significant progress until the third or fourth years of such programs. What exactly would be the downside in giving the program more time to show results? (Isn’t it funny how school choice critics don’t see lack of evidence of achievement as an indictment of public schools?)
Watkins also points out:
According to the DOE evaluation, parents participating in the D.C. Opportunity Scholarship program were significantly less likely to report that their child's school was dangerous when compared to parents who were not offered a scholarship. Furthermore, voucher parents were also significantly more likely to report that they were satisfied with their child's school.
Before it votes on the program, Congress should listen to what the parents and the students have to say about the program. At the Web site, Voices of School Choice students and parents say what they think about the program.
Is rising speculation to blame for rising gas prices? Presidential candidates John McCain and Barack Obama both seem to think so. Each has called for increasing regulatory oversight of trading in oil futures. Sen. Obama, in particular, has said that reining in the speculation will solve the problem of high gas prices and thus obviate the need to develop new energy supplies. Congress has also heard testimony supporting the speculation theory.
Actually, blaming the speculators is based not so much on a theory as a feeling that futures markets exist only to allow clever finance types to manipulate prices to their benefit. But, as in any market, prices are determined by both buyers and sellers. In an editorial criticizing the candidates’ positions, the Wall Street Journal explains how a futures market works:
… it’s simply a price discovery mechanism. Major energy consumers – refiners, airlines – buy and sell these contracts to lock in goods at a future price, as a hedge against volatility. Essentially, they’re guesses about coming oil supply and demand, as well as the rate of inflation. The political theory is that such futures trading is creating a bubble in the spot market (i.e., oil purchased for immediate delivery) beyond oil fundamentals. Thus, $4 gas.
But there’s no inherent reason to “bet” that commodities will go up rather than down. Bet wrong – place all your chips on red, say – and you lose. If a company purchases the future right to buy oil at $140 a barrel and it instead sells for $130, the option is worthless. Besides, somebody has to take the other side of any futures contract: Some are trying to predict where the price will go in the future, while the other side is attempting to sell its future price risk. But no one knows how things will end up.
… speculators – normally known as “traders” – are really managing the exposure risks of American businesses to higher oil prices.
Speculators can make money only if their guesses about future prices turn out to be correct. As AEI’s Kevin Hassett points out, if speculators bet that prices go up, and the bet turns out to be correct, then the speculation serves the socially useful function of creating an earlier price signal for producers to produce more and consumers to consume less.
John McCain’s energy plan includes a proposal to award $300 million to the first person who develops advanced battery technology. This idea, says Jonathan Adler, is a pretty good one. Adler explains why awarding prize for innovation is a much better policy than outright subsidies:
Government-sponsored prizes for innovation are based upon the same principle as the patent system: Encourage innovation by rewarding inventors and entrepreneurs with the promise of super-competitive returns. A patent provides such a reward by giving the innovator a temporary monopoly for his invention. A prize goes one step further by placing a bounty on a particular type of innovation, increasing incentives for potential investors.
Another virtue of government prizes is that tax-payer dollars only get spent if the prize goals are met. Traditional subsidies, on the other hand, are paid out up front. Doled out in accord with politically determined criteria, and often awarded to the most politically connected firms, traditional subsidies often fail to generate anything approaching a positive economic return.
The Left never tires of the storyline that the
In a new paper for the Heritage Foundation, James Sherk has compiled the data on the state of the American worker. Sherk finds that the tale of workers trapped in dead-end jobs just doesn’t hold up.
In any economy, some jobs are lost, while new jobs are created. The American economy, argues Sherk, is steadily replacing lower-paying jobs with higher-paying jobs. The breakout below, from Chart 1 of Sherk’s paper, indicates each of the Census Bureau’s occupation classifications, followed by the median hourly wage, and the change in employment expressed in percentage points of the workforce. (Bold indicates classifications that are growing in number of workers.)
Executive and Managerial; $25.80; +2.1
Professional Specialty; $24.80; +3.8
Technical and Sales; $19.35; +2.3
Precision Production, Craft, and Repaid; $17.75; - 3.3
Administrative Support/Clerical; $15.12; -1.7
Operators, Fabricators, and Laborers; $13.89; -5.7
Services; $11.91; +3.1
Farming, Fishing, and Forestry; $10.62; -0.6
The three highest income-earning occupation classifications have all increased their share of the workforce, while the rest, except for services, have declined. The overall picture is of an economy shifting to higher paying jobs.
Sherk also points to data showing that workers starting out in low-income jobs are not stuck there forever. According to a Department of Treasury study on income mobility:
The average worker's income rose 38 percent. Counterintuitively, the wealthy experienced much less wage growth than was experienced by low-wage workers. The average income of the top 1 percent rose only 13 percent. Workers in the bottom 20 percent experienced the largest increases, with their median income increasing by 90.5 percent and mean income increasing by 232.5 percent.
Benefits and working conditions have also improved. According to Sherk, “The average employee today earns 44 percent more in health insurance benefits per hour of work than in 1994.” Further—and contrary to Sen. Obama’s concern—sick leave benefits have also expanded; the average worker today earns 17 percent more sick leave per hour worked than he did in 1991. Today’s jobs are safer, too. Between 1992 and 2006, fatalities per 100,000 workers fell from 5.2 to 3.9.
Sherk also points out that an important part of the story of success for American workers is mobility between jobs. American workers today are more likely to leave their job for a better job. Yet, this increase in job mobility has been incorrectly interpreted as job insecurity. Meanwhile, retirement plans have shifted to defined contribution plans, from defined benefit plans. This, too, has been interpreted as a negative. However, defined contribution plans are perfectly portable, which makes it easier for workers to leaver their current job for a better one.
Some events that caught our eye:
• FIND OUT where missile defense strategy is headed after the Bush administration. Host: Lexington Institute.
• EXAMINE health care reform through the eyes of actuaries. The Heritage Foundation, along with the Employee Benefits Research Institute and Milliman Inc., hosts a discussion of consumer directed health care plans, wellness, and adverse selection.
• LEARN how and why the Supreme Court has made Americans less free today than they were 200 years ago. The Cato Institute hosts Robert Levy, co-author of The Dirty Dozen, which identifies the 12 worst Supreme Court cases of the modern era.
• HEAR some of the most innovative ideas for improving the efficiency and effectiveness of government. The Pioneer Institute holds its 2008 Better Government Competition Awards Dinner.
• LEARN how preferential trade agreements undermine free trade. The American Enterprise Institute hosts Jagdish Bhagwati.
• HAVE fun—while it’s still legal. The Independence Institutes holds its Sixth Annual Alcohol, Tobacco, and Firearms Party.
For more events, see InsiderOnline’s Conservative Calendar.
The Olympic torch has entered
Monday is the third anniversary of the infamous Supreme Court decision in Kelo v. City of New London, in which the Supreme Court upheld the right of the City of New London, Conn. to use the power of eminent domain to take private property for economic development purposes.
This Saturday, the Institute for Justice will kick off a weekend celebration of property rights with a ribbon-cutting ceremony at
As a result of the Kelo decision,
The Institute for Justice has been tracking the national backlash to the Kelo case, and notes that
• Forty-two states have passed either constitutional amendments or legislation that provides greater protections for property owners facing eminent domain abuse.
• Two state supreme courts have rejected the ruling while four others have said they are likely do so in a future case.
• Property owners and community activists have stopped 23 projects throughout the country that abused eminent domain for private development.
After spending $78 million in taxpayer dollars, the city of
and the private developer have engaged in no new construction since the project was approved in 2000. Indeed, since the property owners disputing the takings owned less than two acres in a 90-acre project area, the city has always had a vast majority of the land available for development. Yet, no new development has occurred. The preferred developer for part of the site, Corcoran Jennison, recently missed its latest deadline for securing financing for building on the site and was terminated as the “designated developer.” New London
New London’s project has been an unmitigated disaster,” said IJ Senior Attorney Dana Berliner, who litigated the Kelo case with Bullock. “Despite the infusion of close to $80 million in taxpayer funds and three years elapsing since the Kelo decision, there has been no new construction in the area and nothing to show but brown, empty fields. The developer was so desperate for funding that it applied to the federal Housing and Urban Development agency to obtain taxpayer-subsidized loans to build luxury apartments on the land where Susette’s neighborhood once stood.” Fort Trumbull
For your bookshelf: The decision in Kelo is identified as one of the 12 worst Supreme Court decisions in Robert Levy and William Mellor’s new book The Dirty Dozen.
Sen. Jim Webb (D-Va.) has proposed to increase GI Bill benefits. Heritage Distinguished Fellow James Talent identifies three problems with Sen. Webb’s legislative proposal:
1. Sen. Webb’s amendment continues the existing imbalance in military compensation: Too much deferred and in-kind benefits, too little pay. Structuring the benefits this way allows Congress to say they are increasing benefits while pushing the costs down the road.
2. Providing a high GI Bill benefit relative to pay encourages those in the military to leave the service sooner in order to get the benefit quicker. That makes it harder for the military to retain quality recruits.
3. Sen. Webb’s amendment does not increase the overall military budget, which means higher GI Bill benefits will be paid for by reductions in the budget for procurement and modernization—areas where resources are already stretched thin.
Earlier this week, we noted how school choice proponents in
(Aside from demonstrating Gore’s hypocrisy on the environment, perhaps this report also illustrates a fundamental point about energy conservation: While increasing energy efficiency may be a worthy end on its own, it has never led to reductions in energy use—nor can it. Becoming more energy efficient just increases the supply of energy that is available for other uses at a lower price; and as an economy grows, people find more and more things to do with energy. Demand for travel, recreational vehicles, labor-saving appliances, electronic gadgets, etc., go up when people get wealthier. In addition to picking up an Oscar, a Grammy, and a Nobel Peace Prize, Gore has added about $100 million to his personal wealth “thanks largely to speaking fees and investments related to global warming hysteria.” It should not be surprising that a guy with some extra cash to burn, does in fact use more energy. We should all want that kind of scratch. Al Gore’s worry is that too many other people will start living like him.)
Other policy groups involved in journalistic efforts include the Show-Me Institute and the John Locke Foundation. As recent articles in The Insider have reported, the Show-Me Institute has partnered with the Heritage Foundation to improve the quality of journalism in Missouri through the Computer-Aided Research and Reporting program, while the John Locke Foundation has been doing and publishing investigative journalism for over a decade. Since the late 1990s, JLF’s Carolina Journal has been the scourge of wheeler-dealer politicians trading favors for votes in
Legal Times reports that some liberals are encouraging their friends on the Left to rethink their approach to the Constitution. The
That sounds exactly like what conservatives have been suggesting for decades. Yet the group’s supporters bill the effort more as a challenge to conservative hegemony over constitutional issues. “The Constitution,” says the group’s founder Douglas Kendall “is, in its most vital respects, a progressive document.” According to the Times, the group plans to file amicus briefs making Constitution-based arguments on behalf of progressive ends.
The Times quotes Yale’s Akhil Amar: “We should embrace the Constitution rather than conceding it … It is not the unique inheritance of conservatives.” Lisa Brown, executive director of the American Constitution Society, tells the Times that
Isn’t it funny how conceding a point can sound so much like taunting. You can almost hear liberals chortling: “How do you like them apples, conservatives!” Well, we like them fine, and wish the group luck in its efforts to convince other liberals that they have been mistaken all this time in not embracing the text of the Constitution.
The Times article does raise one question though: “
With gas prices hovering north of $4 per gallon, many commentators have zeroed in on the need to tap into domestic sources of oil previously declared off limits by Congress. Cato’s Jerry Taylor points out that, while developing domestic energy sources is a good idea, there is another action Congress can take that would help boost supplies, and it wouldn’t take years to get those new supplies to the market, either. And yes, this solution, too, involves shedding an environmentalist inspired bottleneck. Currently, federal rules on sulfur content make it too expensive for refiners to make transportation fuel from heavy crude oil. Suspending (or ending) those rules, says
Peter Huber predicts that a Web of the Future (WOF) will allow human beings to see just far enough into the future to avoid deaths by tsunamis and earthquakes. In addition to saving lives, the WOF will have some interesting implications for debates on environmental issues:
To get out ahead of nature, the WOF will, to begin with, offer instant access to almost every environmental variable that science can measure, from points scattered all across the face of the planet. Most sensors are now tiny semiconductor devices, packaged for direct connection to digital networks. Year by year they get better, cheaper and easier to network. They’re already widely deployed to monitor and control the insides of homes, offices, automated factories, cars, ships and planes. Fascinated as we humans are by the world that surrounds us, sensing and networking the rest of the planet will inevitably follow.
And bit by bit that will democratize our discourse about all things environmental. Most obviously, networking the earth will make every open society much better at evading nature’s fury. As Ian Ayres (my colleague in forbes columny) writes in his insightful and delightful Super Crunchers (Bantam 2007), the technologies for assembling and mining huge data sets have converged over the last couple of decades, and they give us remarkable new power to pluck the future out of the past. As many others have observed, aggregate expertise—the wisdom of crowds—generally beats the solitary kind hands down. With more people scrutinizing more data we will get ahead of earthquakes too, sooner or later—perhaps not by much, but by enough to evacuate schools before they collapse on our children.
Big Green—the regulatory ecological complex that tells the rest of us exactly what woe will befall us if we don’t do just as we’re told—isn’t going to like this one bit. Its predictions aren’t well anchored in data; they come mainly from huge mathematical models whirling inside huge closed computers. The models are as opaque as the planet they claim to emulate; they keep changing; they’re too closely guarded to be confronted head-on by torrents of inconvenient facts. Instrumenting and wiring the planet itself will, over time, destroy its hegemony.
Now, however, the state has developed a plan to consolidate school districts, and that plan threatens the town tuitioning arrangement. In two different school districts, however, proponents successfully defended the choice program. In one case, an e-mail campaign was used to rally supporters to show support at a school board meeting. Instead of taking an expected vote to kill the choice program, the school board agreed to put the question before the voters.
In another case, a local group launched a campaign in support of a ballot proposal to preserve choice. As part of that campaign, the group created a Web site via the social networking tool Gather. The ballot proposal succeeded.
Inspired by these successes, the
Best of luck, guys.
Yesterday, the Department of Education released a study identifying a few signs that the D.C. Opportunity Scholarship program has helped improve the academic performance of participating students. As summarized by the Washington Post:
The report released yesterday by the U.S. Education Department’s
covered only 19 months of students’ participation in the program. Accordingly, it found no statistically significant difference in test scores overall between students who were offered a scholarship and students who were not. But researchers reported an encouraging trend. Specifically, 88 percent of participating students are reading two to four months ahead of children who did not receive a scholarship. It is hard, as institute director Grover J. Whitehurst noted, to positively drive reading results, so the findings are significant. of Institute Education Sciences
So, too, is the report’s conclusion that parents continue to be satisfied with the program and the all-important choice it gives them in the education of their children. The study echoed previous reports in which parents whose children were offered scholarships were much more likely to give their child’s school an A or B grade.
Congress should read the report and note these positive trends before it votes to kill the program.
Fixing racial and socioeconomic disparities in health care is the goal of a new $300 million project launched by the Robert Wood Johnson Foundation. But, as John Goodman points out at his blog, the best thing that can be done to address racial disparities doesn’t cost a dime: getting more free market incentives into the health care system.
Free markets reward those who serve the consumer, and punish those who don’t. Providers that refuse to serve some consumers because of racial bias lose business to providers that do not engage in bias. But our health care system, dominated as it is by third-party payers, isn’t oriented toward competing for patients. Competing for African-Americans patients, argues Goodman, should mean customizing, not standardizing care:
One study found that from two-thirds to three-quarters of the racial disparities gap for diabetics cannot be explained by socioeconomic factors or insurance status. Also, in this study, blacks and whites were seeing the same doctors. The problem, the authors concluded, is not that black patients were treated differently. It’s that they were treated the same when their needs required different care.
For more information, see “Hugo Chávez, Colombia, and the FARC: A Change of Heart?” by Ray Walser, The Heritage Foundation, June 16, 2008.
Some events that caught our eye:
• DISCOVER how the National Labor Relations Act can be amended to give employees options other than traditional labor unions for representation. The Heritage Foundation hosts Professor Barry Hirsch of
• ASSESS the unorthodox policy measures adopted by the Federal Reserve in response to the bursting of the housing and credit market bubbles. Host: American Enterprise Institute.
• EXPLORE congestion relief options at the
• HEAR about the role that forums for civilized discussion played in helping to build support for ending racial preferences in
• FIND OUT if the impact of foreclosures on housing prices has been overstated. Host: American Enterprise Institute.
• EXAMINE the Mexican political climate with George Grayson, author of Mexican Messiah: Andres Manuel Lopez Obrador. Host: Hudson Institute.
• HEAR the best minds discuss education reform at Excellence in Action: A National Summit on Education Reform. Host: Foundation for Excellence in Education and the James Madison Institute.
• LEARN how the Supreme Court’s 2007 term will impact the free enterprise system. Host:
• ASSESS the
• SEE the Acton Institute’s new film, The Birth Freedom, at its Washington, D.C., premiere.
• TAKE IN a debate on health care between John Goodman of the National Center for Policy Analysis and Jeanne Lambrew of the Center for American Progress.
For more events, check InsiderOnline’s Conservative Calendar.
Population control is a gigantic, costly, and inhumane fraud. … There are different ways to measure business environments. … The regime of the National Islamic Front in
• In 2005, the District’s public schools had a dropout rate higher than that of any state’s schools.
• In 2007, D.C. students’ reading scores were lower than the scores achieved by students in any other state.
• The District graduates only 59 percent of students, again one of the lowest marks in the country.
• D.C. ranks first in the nation for percent of budget spend on administration and last in the nation on percent of budget spent on instruction.
• In 2006, 15,000 of
• The percentage of students in grades 9 through 12 who “reported being threatened or injured with a weapon on school property during the previous 12 months” was 12 percent in 2005. That was the highest rate in the nation and well above the average of 7 percent across the country.
The D.C. public schools achieve such results at a cost of $14,800 per student. The D.C. Opportunity Scholarship Program, meanwhile, provides vouchers worth $7,500. According to a survey by
The Wall Street Journal identifies the reason that Norton and other Democrats in Congress are opposed to the program:
If the D.C. program continues for another few years, we will be able to learn more about the impact of vouchers on educational outcomes. The reason unions want to shut the program down immediately isn’t because they’re afraid it will fail. They’re afraid it will succeed, and show that there is a genuine alternative to the national scandal that are most inner-city public schools.
Between 1989 and 2005, the cost of college increased at double the rate of inflation, fueled in part by the increasing availability of financial assistance for students. Student financial assistance, it seems, has largely assisted colleges and universities increase revenues. Kevin Carey and Frederick M. Hess write about an innovative solution: Allow investors to finance students’ educations in return for a percentage of the student’s future earnings. This reform, say Carey and Hess, would shift risks from students and taxpayers to the investors and the universities, while creating more robust market incentives for colleges and universities to provide value while keeping costs down:
… lenders would also be interested in which particular college the student attends. Almost immediately, investors seeking to maximize their return would uncouple the college component from the student portion, separating the value added by a given institution from the attributes of its entering students.
In gauging college value, graduation rates would be a critical variable, because the job market doesn’t pay much to dropouts. Unfortunately, many colleges have terrible graduation outcomes, particularly for disadvantaged students. Investors would also be interested in long-term results: what are post-graduation job placement rates, in what fields, and at what salaries?
... the smart money would go hunting for bigger returns at less expensive colleges that add great value. After all, other things equal, an investor fares much better by lending a student $48,000 over four years and collecting 4 percent of his or her future earnings than by lending that student $180,000 and collecting the same 4 percent.
Investors who found the hidden gems early would be rewarded, creating incentives for private firms to seek out those institutions and alerting potential students to their value. As money sought out students at Great Value U., costs to new students would decline (since investors would ask for a smaller percentage of future earnings), effectively lowering prices. Meanwhile, investors would steer away from overvalued institutions, making them more expensive, raising red flags, prompting hard questions from investors, and lending real urgency to institutional efforts to cut costs and boost student success.
What about the dangers of “student bond bubble”? That would only hurt the investors. “Graduates,” say Carey and Hess, “would be unharmed, because—unlike in the housing market—they would already have fully consumed their education.”
It’s an idea that makes a lot of sense—too much sense for the political class to see its value anytime soon. Politicians like giving things to people. It’s what gets them elected. But if students could finance their educations through private investors—just as entrepreneurs finance new businesses—then they wouldn’t have much use for politicians who market themselves as champions of student aid. Still, it’s an idea worth pushing.
Yesterday, a wreath was laid at the Victims of Communism Memorial to mark the one-year anniversary of its unveiling. Heritage’s Lee Edwards spoke, announcing that the next step in the project to make sure the world does not forget the evils of Communism will be to unveil a Global Museum of Communism on the Internet. The Global Museum of Communism will launch next year to coincide with the 20th anniversary of the collapse of Communism in
We will tell the truth about communism at ceremonies like this, on the Internet, in museums and libraries in
and around the world so that never again will nations and peoples allow so evil a tyranny to terrorize the world. America
Research shows: Fathers play an important role in the lives of their children. Fathers who are present in the home and engaged with their children early on help their children achieve success in life.
Proponents of European integration are worried today that Irish voters will reject the Lisbon Treaty, which is essentially a repackaging of the EU Constitution that was defeated in 2005. They are so worried that they are making rather strange arguments for why the Irish should vote for the treaty. The New York Times quotes French foreign minister Bernard Kouchner saying:
It would be very, very troubling that we would not be able to count on the Irish who counted a lot on
Times reporter Sarah Lyall goes on to explain:
Irelandis one of Europe’s great success stories. European largess has helped fuel the country’s extraordinarily rapid transformation from a poor, homogeneous, largely agrarian society to a place of flourishing international business.
It doesn’t speak well of the treaty that its proponents must resort to saying “you owe us” in trying to convince Irish voters. If giving the EU more power were prospectively good for
The Irish have had success with less government. The Lisbon Treaty further centralizes power in a club that sees low taxes as contrary to European solidarity. Irish voters are doing the math now.
RJ Smith reports that the “beat goes on” for government land acquisition: three new wilderness areas approved last week, courtesy of Reps Tom Udall (D-N.M.), Jim Costa (D-Calif.), and Mary Bono (R-Calif.). Smith writes:
The National Wilderness System already includes over 104,000,000 acres of land—that is an area larger than the entire state of
—most of which has never been inventoried for vital minerals or energy reserves, and is now locked up forever. It can only be used by a tiny percentage of the population as all mechanized equipment is forbidden—including for rescue operations. The unmanaged forests are the source for insect infestations and disease and uncontrollable forest fires. And we keep creating more and more. California
Among the resources locked up in federal lands: 117 billion barrels of oil.
At National Review, Jim Boulet reports that the Left has found a new vehicle for bringing back the Fairness Doctrine. They are now calling it “localism,” and the Federal Communications Commission is pushing the concept. The FCC has proposed new regulations that would require radio stations to consult with permanent advisory boards on whether the station’s programming sufficiently reflects the cultural diversity in the community. It sounds like a blank check for every activist with an identity politics agenda. Imagine what that would do to debate on sensitive issues like immigration, law enforcement, and fighting terrorism. Says Boulet:
Think of the Council for American-Islamic Relations (CAIR), whose touchiness is already legendary — what would such a group do if legally guaranteed influence over radio programming? CAIR has equally touchy affiliates in 19 states.
Should the FCC prevail, radio stations will return to the sort of programming that predominated during the days of the Fairness Doctrine, only filtered by 2008-style political correctness. Instead of full debate on controversial issues such as amnesty for illegal aliens, AM radio will become a herd of independent minds, a vast “Air America” from sea to shining sea in which never a conservative word is heard.
In a misguided editorial, the Christian Science Monitor notes high gas prices are partly the result of rising consumption that is subsidized by foreign governments. At first blush, the concern about subsidies seems compelling. The Monitor points out, for example:
About half of humanity, from
Indiato , now benefits from cut-rate petroleum prices. In 2008, these countries will account for all the growth in world oil demand, or an additional one million barrels a day, according to Deutsche Bank. Their consumption will be the highest in eight years. Chile
But this calculation, apparently, lumps together both price controls and subsidies. It’s worth pointing out some basic economics: Both price caps and subsidies are bad policies, but they send opposite signals to producers. Price caps, by keeping prices artificially low, increases demand and reduces the incentive to produce which leads to shortages (and possibly riots). All things being equal, putting a cap on prices in country A will induce producers to sell more in unregulated country B where they can obtain a higher price (assuming that the producers are not restricted by controls on exports). So in the short run, price caps in country A are good for the consumers of country B. By contrast, lowering the price to the consumer via a subsidy, rather than an explicit cap, gives producers the opposite incentive: to produce more in order to meet the increased demand. Price increases are thus moderated by increased supply. We should also point out that subsidies aren’t just free money for consumers. Ultimately, governments that provide subsidies must pay for them, which means that the taxpayers who fund the government must pay for them. Most consumers are taxpayers, too. All this is by way of pointing out that foreign consumers do not magically gain a comparative advantage over
None of which should distract the U.S. Congress from fixing its own bad policies. The Department of Interior estimates that there are 117 billion barrels of recoverable oil on public lands that are currently inaccessible because of laws that prohibit drilling. Further, Dan Kish of the Institute for Energy Research estimates that there are 2 trillion barrels of oil that could be extracted from shale deposits in the West. Two trillion barrels, he says, could run the
Since 1948, state and local tax revenues have almost doubled as a percentage of gross domestic product, rising from 5.5 percent to 10.1 percent of GDP in 2005. Does this trend reflect a growing demand by citizens for more services from state and local governments? Not necessarily.
Benjamin Barr of the Goldwater Institute notes a puzzle:
Because the federal government can borrow more easily than the states, and because states (unlike the federal government) must fear that tax hikes will induce an exodus of productive citizens and businesses, one would expect taxes and spending to grow faster at the federal than at the state or local level.
Yet, federal tax receipts have varied only slightly from the post-World War II level of 17 percent.
Why have federal revenues stayed flat while state revenues have nearly doubled? One reason, says Barr, is that the availability to states of federal matching funds has induced states to tax more and spend more than their citizens would otherwise be willing to support. It also leads states to pursue federal priorities instead of state priorities.
How big is the problem? Heritage’s Sven Larson calculates that federal aid to the states plus the money that states spend on Medicaid and the State Children’s Health Insurance Program constituted 42.5 percent of state spending in 2005. Federal transfers to the states were only 2 percent of state spending in 1929, and 12 percent in the 1960s.
Unfortunately, there is little states can do on their own to get out of this trap. Barr says: “It is well-nigh impossible to counteract the destructive effects of federal funding programs.” Leadership on this issue will have to come from a U.S. Congress that recognizes that states exist for a reason: As Ronald Reagan said: “State and local governments uniquely possess the constitutional authority, the resources, and the competence to discern the sentiments of the people and to govern accordingly.” State sovereignty also creates competition among the states for discovering the best policies (much as globalization creates competition among nation states for discovering the optimal mix of low taxes and quality services). But if federal programs continue to turn states into merely the executors of federal policy, then we should ask: Why do we have states?
See “Arizona’s Struggle for Sovereignty: The Consequences of Federal Mandates,” by Benjamin Barr, the Goldwater Institute, June 3, 2008; and “Federal Funds and State Fiscal Independence,” by Sven Larson, The Heritage Foundation, May 15, 2008.
For more information, see:
• “Congress’s Budget Resolution Promises Spending Hikes Now and Tax Hikes Soon,” by Brian M. Riedl, The Heritage Foundation, June 5, 2008.
• “Nuclear Power Needed to Minimize Lieberman-Warner’s Economic Impact,” by Jack Spencer, The Heritage Foundation, June 2, 2008.
Some events that caught our eye:
• EXAMINE whether the recent decision to list the Polar Bear as threatened under the Endangered Species Act will make energy more expensive. Host: American Enterprise Institute.
• FIND OUT if the Second Amendment creates an individual right or a collective right to keep and bear arms. Host: Independent Institute.
• LEARN what makes for a positive business environment, as judged by four different ranking methodologies. Hosts: The Heritage Foundation and the Business Growth Initiative.
• HEAR about the role that
For more events, check InsiderOnline’s Conservative Calendar.
Conservatives live happy lives. … Research suggests that stimulus checks are not going to stimulate the economy. … Turmoil looms over Sudan yet again. … Worldwide terrorism is a threat to the civil liberties of the citizens of Western nation states. … The free world’s shield is its own identity, vigorously asserted and framed by a commitment to democratic life.
George Will was good on the Colbert Report this week.
Hat tip: Tertium Quids blog.
On Wednesday, the Lynde and Harry Bradley Foundation held its annual Bradley Prize ceremony. Economist Gary Becker, historians Victor Davis Hanson and Alan Charles Kors, and urban activist Robert L. Woodson Sr. were honored.
Heritage was honored to host Mr. Woodson at its 2005 Resource Bank, where he gave a wonderful talk on the importance of individual character in fighting poverty.
Last summer, Dr. Kors participated in a roundtable discussion on the victims and crimes of Communism, which was held in conjunction with the unveiling of the Victims of Communism Memorial.
Just this week, Dr. Hanson visited Heritage to help us put the challenge of defending civil liberties while fighting terrorism into its proper context.
As best we can tell, Heritage has not been honored with a visit from Dr. Becker, though our scholars routinely cite him in their papers.
Congratulations to all the winners.
Americais the of oil shale deposits. With the 2 trillion barrels of oil we could extract, the Saudi Arabia could run for 250 years on that source alone. Unfortunately, the best deposits lie under nationalized lands in the West, and the Congress passed a law in 2007 making it illegal to lease the lands for energy development. US
Under the Lieberman-Warner “cap and trade” plan, companies that can’t reduce emissions enough to stay under their limits are allowed to offset some of those emissions by buying credits for emissions reductions abroad—in effect, paying foreign companies to emit less. (Foreign companies get the carrot, while
Will that actually work? The United Nations has been trying to do the same thing with its Clean Development Mechanism.
The BBC reports that the CDM is paying for reductions that would have occurred anyway. Reporter Mark Gregory asked a number of Indian companies receiving credits through the CDM, whether the credits were essential in their decisions to undertake projects such as installing biomass generators, or incinerators to destroy greenhouse gases before they enter the atmosphere. In three cases highlighted by the story, the answer was: No, the money from the CDM was just a bonus.
Sen. James Inhofe, writing in the Wall Street Journal, points out that the burdens of the global warming “cap and trade” plan would fall most heavily on the poor, and that it would interfere with efforts to expand free trade:
A recent CBO report found: “Most of the cost of meeting a cap on CO2 emissions would be borne by consumers, who would face persistently higher prices for products such as electricity and gasoline. Those price increases would be regressive in that poorer households would bear a larger burden relative to their income than wealthier households.”
The poor already face energy costs as a much higher percentage of their income than wealthier Americans. While most Americans spend about 4% of their monthly budget on heating their homes or other energy needs, the poorest fifth of Americans spend 19%. A 2006 survey of
homeless families with children found that high energy bills were cited as one of the two main reasons they became homeless. Colorado
Lieberman-Warner will also hinder
competitiveness, transferring American jobs overseas to places where environmental regulations are much more lenient. Instead of working to eliminate trade barriers on clean energy and lower emitting technologies, the bill imposes a “green,” tariff-style tax on imported goods. This could provoke international retaliatory actions by our trade partners, threatening our own export markets and further driving up the costs of consumer goods. U.S.
This “cap and trade” plan, then, goes in the opposite direction from the findings of the Copenhagen Consensus, which announced last week that expanding free trade via the Doha Development Agenda is surpassed only by addressing malnutrition as the most important priority for improving the state of the planet. Expanding free trade would yield an extra $2.5 trillion annually to the economies of developing nations.
The Senate this week is debating a bill that attempts to mitigate global warming through a “cap and trade” permitting system that over time imposes severe constraints on the emissions of greenhouse gases. By 2050, the bill limits
In a recent Heritage Foundation Backgrounder, Ben Lieberman identifies the significant costs and minimal benefits of the bill.
• GDP hit:
It is hard to think of any economic activity that does not involve energy, and there is not one that would not be made more expensive by Lieberman–Warner. No matter how measured, the impacts of the bill on the American economy overall as well as on individuals and households would be substantial and hardly different from a massive energy tax.
The impact on the overall economy is reflected in cumulative gross domestic product (GDP) losses estimated at $1.7 trillion (with generous assumptions) to $4.8 trillion (with more realistic assumptions) by 2030. The single-year GDP losses would range from $111 billion to $436 billion, or $949 to $3,726 per household for each of the nation’s 117 million households. … Thus, the annual costs of the Climate Security Act would significantly exceed the Department of Homeland Security’s 2007 expenditures of $43 billion and could also exceed the $155 billion spent on highways at all levels of government in 2005.
After-tax incomes decline by $47 billion to $120 billion in 2015, or $402 to $1,026 per household. Declines in consumption average $54 billion to $113 billion over the forecast period, or $462 to $966 per household annually.
• Job losses:
’s Climate Security Act would spark a temporary increase in employment in the first few years as regulated companies invest heavily to comply. After that, however, the bill causes job losses that are expected to exceed 500,000 before 2030 even under the most optimistic assumptions. … It should be noted that these are net job losses after the jobs created by the Climate Security Act are taken into account. Particularly hard hit are manufacturing jobs as higher energy costs dampen several energy-intensive sectors. … Some of the lost jobs will be destroyed entirely, while others will be outsourced to nations like China that are unlikely to place similar, if any, constraints on their emissions. America
• Higher energy prices (amounting to a regressive excise tax) for consumers:
While the Lieberman–Warner bill lowers many household incomes, it raises the cost of living, particularly by raising energy prices. To meet the bill’s targets, consumer energy demand must be driven down, which is achieved through higher prices. The price per gallon of gasoline is expected to increase by at least 29 percent by 2030: about $1.10 more per gallon based on current prices. By 2030, average household electricity costs are also expected to increase by $647 annually, and natural gas is expected to increase by $303.
• Little benefit: The bill imposes constraints on the
Assume that all the nations of the world fulfill their obligations under the Kyoto Protocol (they won’t!), which reduces global emissions about 5% below 1990 levels. That results in a “savings” of global warming of 0.07 degrees Celsius by 2050—an amount too small to measure, as global temperatures vary on their own about twice that much from year-to-year.
Now add in Lieberman-Warner. Say the
actually does what the law says, though no one knows how to. The result is an additional 0.013 degrees (C) of “prevented” warming. U.S.
In a recent National Review article, Heritage’s Michael Franc notes another set of problems with the bill: As a tax on energy, it is a massive revenue raiser, and thus paves the way for an ever larger federal government. The bill will bring in an extra $1.2 trillion over the first seven years of the “cap and trade” system. Sen. Barbara Boxer, recognizing that the bill’s prospective damage to the economy will be a significant political hurdle, has introduced a substitute bill that seeks to buy political support for the bill by dedicating some of the new revenue stream to things like worker retraining and adjustment. Franc writes:
Liberals instinctively want their global-warming regime to resemble the tax code. Saturate it with special-interest provisions to protect favored constituencies from pain. Place a disproportionate share of the burden on the privileged few. If the wealthiest 1 percent of taxpayers can pay 40 percent of all income-tax revenue, why can’t they also cough up 40 percent of all CO2-emission reductions? And, if the bottom half of taxpayers only have to pay 3 percent of taxes, then why can’t we exempt them from the economic pain and dislocations inherent in any cap-and-trade scheme?
But this global-warming free lunch can’t be subsidized away. Why not? That unforgiving cap on overall carbon emissions in Lieberman-Warner means if you alleviate the burden on one favored group, you necessarily have to increase it on others. The reductions ultimately have to come from somewhere. We must comply with that cap.
Industries that don’t lobby successfully for a subsidy will incur the most concentrated economic harm. And, of course, they will pass these costs on to all those who thought they had hired really good lobbyists to protect their interests.
• “The Climate Security Act S. 2191/S. 3036 : Talking Points on the Lieberman-Warner Energy-Rationing Bill“ by Myron Ebell, Competitive Enterprise Institute, May 30, 2008.
• “The Lieberman-Warner Cap and Trade Bill: Quick Summary and Analysis“ by Casey Lartigue and Ryan Balis,
Last week a group of eight economists (including five Nobel laureates) meeting in
The economists were charged with the task of finding the so-called Copenhagen Consensus 2008: Find the best use of an extra $75 billion from 50 different proposals for improving the state of the planet. The proposal to spend $60 million on micronutrients would reach 80 percent of the 140 million malnourished children worldwide. The estimated benefits of such an investment are $1 billion annually—a benefit-cost ratio of 17-1.
Liberalizing trade via the Doha Development Agenda was ranked as the number two priority, with estimated benefits of $3 trillion annually, of which $2.5 trillion would be realized by developing countries. Liberalizing trade requires a budget of exactly zero.
Czech President Václav Klaus brought an important message about environmentalism to several American audiences last week. Speaking at the National Press Club, keynoting the Competitive Enterprise Institute’s annual dinner, and meeting with the editors of the Washington Times, Klaus argued that environmentalism today poses a threat to freedom that is in key respects equivalent to the threat posed by Communism in the last century.
Klaus’s appearances coincide with the publication by the Competitive Enterprise Institute of his new book Blue Planet in Green Shackles. Here is a sample of the argument from his book:
Nothing like a predefined optimal state of the world exists that we should, for some reason, preserve and protect. The state of the world is the result of spontaneous interactions of a great number of cosmic, geological, climatic, and other factors, as well as of the effect of living organisms, which always look for the best conditions for their reproduction. The equilibrium that exists in nature is a dynamic one.
The environmentalists’ attitude toward nature is analogous to the Marxist approach to economics. The aim in both cases is to replace the free, spontaneous evolution of the world (and humankind) by the would-be optimal, central, or—using today’s fashionable adjective—global planning of world development. Much as in the case of Communism, this approach is utopian and would lead to results completely different from the intended ones. Like other utopias, this can never materialize, and efforts to make it materialize can only be carried out through restrictions of freedom, through the dictates of a small, elitist minority over the overwhelming majority.
Here’s a four-minute excerpt of his meeting with the Washington Times:
For more information see:
• The Lieberman-Warner Climate Change Act: A Solution Worse that the Problem, by Ben Lieberman, The Heritage Foundation, June 2, 2008
• Five Myths about the Lieberman-Warner Global Warming Legislation, by Ben Lieberman, The Heritage Foundation, May 30, 2008
• The Effect of the Lieberman-Warner Global Warming Legislation on States, by William W. Beach, Ben Lieberman, David Kreutzer, and Nick Loris, The Heritage Foundation, May 22, 2008
• The Economic Costs of the Lieberman-Warner Climate Change Legislation, by William W. Beach, David Kreutzer, Ben Lieberman, and Nick Loris, The Heritage Foundation, May 12, 2008