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InsiderOnline Blog: June 2011

Fuel Efficiency Standards Have Unintended Consequences

Americans could end up with less safe cars in the years ahead if, as expected, the Obama administration decides to increase fuel efficiency standards. In 2010 automakers were required to meet a fleetwide average of 29.2 miles per gallon. That target goes to 35.5 mpg by 2016. The Environmental Protection Agency is reportedly considering a target of 56 miles per gallon for sometime between 2017 and 2025.

The higher standards have the potential to induce automakers to make lighter vehicles that are more fuel-efficient, but also less crash-worthy. Indeed, according to a 2002 report from the National Academy Sciences, that tradeoff has already been made. The NAS estimated that increases in fuel economy standards in the 1970s and 1980s led to less safe vehicles and an additional 1,300 to 2,600 auto accident fatalities per year.

See: Effectiveness and Impact of Corporate Average Fuel Economy Standards, The National Academies Press, 2002.

Posted on 06/30/11 05:05 PM by Alex Adrianson

The Deficit Is Worse Than We Think …

says Lawrence Lindsey:

At present, the average cost of Treasury borrowing is 2.5%. The average over the last two decades was 5.7%. Should we ramp up to the higher number, annual interest expenses would be roughly $420 billion higher in 2014 and $700 billion higher in 2020. The 10-year rise in interest expense would be $4.9 trillion higher under “normalized” rates than under the current cost of borrowing. Compare that to the $2 trillion estimate of what the current talks about long-term deficit reduction may produce, and it becomes obvious that the gains from the current deficit-reduction efforts could be wiped out by normalization in the bond market.


[O]fficial growth forecasts are much higher than what the academic consensus believes we should expect after a financial crisis. That consensus holds that economies tend to return to trend growth of about 2.5%, without ever recapturing what was lost in the downturn. But the president’s budget of February 2011 projects economic growth of 4% in 2012, 4.5% in 2013, and 4.2% in 2014. That budget also estimates that the 10-year budget cost of missing the growth estimate by just one point for one year is $750 billion. So, if we just grow at trend those three years, we will miss the president’s forecast by a cumulative 5.2 percentage points and … incur additional debt of $4 trillion. That is the equivalent of all of the 10-year savings in Congressman Paul Ryan’s budget, passed by the House in April, or in the Bowles-Simpson budget plan. [“The Deficit Is Worse Than We Think,” by Lawrence B. Lindsey, Wall Street Journal, June 28, 2011.]

Lindsey goes on to note: “The tax-the-rich proposals of the Obama administration raise about $700 billion, less than a fifth of the budgetary consequences of the excess economic growth projected in their forecast.”

Posted on 06/30/11 04:33 PM by Alex Adrianson

Economic Freedom Improves Lives

Increasing economic freedom produces lower infant mortality, longer lives, less poverty, and more jobs:

Posted on 06/28/11 03:09 PM by Alex Adrianson

Still More Evidence that Federal Workers Are Overpaid

Federal workers are indeed overpaid, according to a new study by Jason Richwine. Many studies have already found, after controlling for things like age, education, and experience, that federal workers earn more than their private-sector counterparts. But maybe federal workers have some special skills that make them more valuable, or maybe they are more motivated than their private-sector peers. That’s what the unions would have you believe. But it’s not true. Richwine’s new study addresses the shortcomings of previous studies. Instead of comparing different workers at one point in time, Richwine follows the same workers over time to measure the impact of switching between government and private-sector jobs. He found that when private sector workers switch to a federal job, their wages increase an average of 8.9 percent. When private sector workers switch to another private sector job, their wages increase by only 1.0 percent. That implies a federal wage premium of 7.9 percent.

Richwine’s study is “Same Worker, Higher Wage: A Study of Workers Who Switch from Private to Federal Employment,” published by The Heritage Foundation, June 15, 2011.

Posted on 06/28/11 11:19 AM by Alex Adrianson

Socialists Declare Defeat …

… and urge that we move on to … socialism.

Sharing the wealth so that workers can have greater material comfort isn’t the point of socialism—not anymore. No, the reason to get rid of capitalism is not that it has failed, but that it has succeeded too well, according to some Marxist thinkers. One is Renata Salecl, a Slovenian professor of psychoanalysis and law. Salecl hales from the critical legal studies movement, which tends to think law is just another form of politics. According to Salecl’s book, Choice, capitalism produces so much material wealth that we have more choices than we can bear. Grocery stores are a kind of prison, goes the argument. Here’s a cute video explaining it all:

To sum up: Choosing a wine or a cheese brings paralyzing anxiety. Choosing to let someone else decide what you’ll eat or drink brings … what? The video doesn’t ever explain what the alternative is. But one possibility would be that it brings nothing to eat or drink at all. That’s what the Ukrainians experienced under Stalin in the 1930s, the Chinese experienced under Mao in the late 1950s, the Ethiopians experienced under Mengistu in the 1980s, and the North Koreans experienced under Kim Jong Il in the 1990s.

According to historian R.J. Rummell, in the 20th century, 55 million people died from famine and famine-induced diseases produced by Communist rule. Just to complete the accounting, Rummell also estimates that another 55 million died by way of bullets, torture, rape, etc., bringing the total communist culling of the human herd to 110 million for the century—about two and a half times the total number of deaths from combat in all foreign and internal wars of the century.

Posted on 06/27/11 05:43 PM by Alex Adrianson

Ayn Rand, the Comic Book

Ayn Rand is the latest offering from Blue Water’s Female Force series of comic books. Written by John Blundell, former director of the Institute for Economic Studies, it makes a good introduction for those unfamiliar with Rand or her works. The publisher says:

The comic book provides an entertaining yet scholarly look at the author of such seminal works as “The Fountainhead” and “Atlas Shrugged.” Even 30 years after her death, her sales of her books continue to sell in the hundreds of thousands each year. Bluewater also worked with the “Ayn Rand Institute” on the comic book.

“When the American economy went into a nose dive recently what did we all turn to? Did we dig out battered old Econ 101 textbooks? Did we turn to the writings of some aged Ivy League professor? NO! Instead we dusted off or repurchased ‘The Fountainhead’ and ‘Atlas Shrugged’ those great classic American novels by Russian immigrant Ayn Rand which deal so brilliantly with the fundamentals of a free and prosperous society of responsible individuals,” said author John Blundell.

The series includes a comic book on Margaret Thatcher, also written by John Blundell.

Posted on 06/24/11 03:28 PM by Alex Adrianson

Higher Spending Is the Cause of the Debt

… not too little revenue, says the Congressional Budget Office in its latest Long-Term Budget Outlook:

(h/t: “CBO Report Reveals Spending Disaster,” by Chris Edwards, Cato-at-Liberty, June 23, 2011.)

Posted on 06/24/11 03:02 PM by Alex Adrianson

YouTube Tips

Last weekend at RightOnline, Ed Frank gave a talk on how to produce effective YouTube videos. We were there and took notes:

Why YouTube is important: YouTube gets over 3 billion views per day. Every minute 48 hours of video is uploaded. Eighteen- to 29-year-olds visit YouTube for political informatin more than they check candidate Web sites or online newspapers.

Rule #1: Always have a pocket video camera with you so that you can expose liberal hypocrisy, corruption, and stupidity when you see it.

Keys to a Good Interview
• Ask polite questions.
• Do your homework.
• Make your point with your question. This works better than leading with a monologue.
• Act like a lawyer; know the answer to your question before you ask it
• Use two cameras so that you can fully capture your subject’s responses.
• Focus on elected officials or celebrity activists. Don’t waste your time on idiots that nobody pays attention to.

Keys to a Good Video
• Have relevant newsworthy content.
• Put your stuff up quickly. Speed kills.
• Get as close to your subject as possible.
• Use a tripod and microphone.
• Learn basic video editing (e.g., Windows MovieMaker).
• Open with an establishment shot.
• Incorporate music. But beware of royalty issues. Royalty-free music is available.
• Keep it under two minutes.
• Find more tips by searching on YouTube. If you don’t know how to do something, somebody else has probably already made a how-to video on it.

Get Your Video Seen
• Use smart titles and tags.
• Get it out on Facebook and Twitter.
• Send it to reporters and bloggers.

Posted on 06/24/11 02:48 PM by Alex Adrianson

Restoring the Scientific Method

The sixth International Conference on Climate Change is on tap for next week. The Heartland Institute and other organizers of this event are regularly referred to as “deniers” for their skepticism of claims that global warming is a serious problem requiring political action. Those who level that charge appear not to have noticed that Heartland has invited Al Gore and others from what might be called the “alarmist camp” to make their case. As Heartland’s James Taylor tells Forbes: “Al Gore, James Hansen, Michael Mann, Gavin Schmidt, Alan Robock, the list goes on and on … They all seem to have some sort of scheduling conflict whenever they have to share the stage with a scientist who will be challenging their evidence.”

But Heartland did find someone who’s willing to debate. The conference features a luncheon debate between Scott Denning and Roy Spencer. Here’s what Scott Denning had to say at a previous International Conference on Climate Change:

The theme of this year’s conference is “restoring the scientific method.” It will be held June 30 – July 1 at the Marriott Wardman Park in Washington, D.C.

Posted on 06/24/11 02:25 PM by Alex Adrianson

African-Americans Are Heading South for Opportunity

The times they are a-changin, reports the Old Gray Lady:

[B]lack New Yorkers, including many who are young and college educated, are heading south.

About 17 percent of the African-Americans who moved to the South from other states in the past decade came from New York, far more than from any other state, according to census data. Of the 44,474 who left New York State in 2009, more than half, or 22,508, went to the South, according to a study conducted by the sociology department of Queens College for The New York Times.

The movement is not limited to New York. The percentage of blacks leaving big cities in the East and in the Midwest and heading to the South is now at the highest levels in decades, demographers say.  

The movement marks an inversion of the so-called Great Migration, which lasted roughly from World War I to the 1970s and saw African-Americans moving to the industrializing North to escape prejudice and find work. [“For New Life, Blacks in City Head South,” New York Times, June 21, 2011.]

The article goes on to note that New York has become increasingly unaffordable. It might have something to do with the burden of government. New York’s top tax rates for both personal and corporate taxes are both the highest in the country. It has the 43d-worst ratio of public employees to general population and the 43d-highest property tax burden. New York is not a right-to-work state. These and other factors put New York dead last in the lastest ALEC-Laffer State Economic Competitiveness Index (“Rich States, Poor States”), just released this week.

Posted on 06/24/11 11:58 AM by Alex Adrianson

Not Doing Workers a Favor

“Quickie elections,” the latest scheme from the National Labor Relations Board to tilt the playing field in favor of unions, would prevent workers from getting all the facts before making a choice whether to vote for a union. The proposal, unveiled Tuesday, shortens the period for a union certification vote from about 40 days to 10 to 21 days.

As James Sherk points out, employers typically don’t know that a union has been busy making its case to his workers until the petition for an election has been filed. Employers need more time to let their employees know the potential downsides of unionization, and the employees should have the opportunity to get that information. Sherk writes:

Union organizers do not impartially advocate workers’ best interests. They are salesmen. They get paid to persuade workers to become dues-paying union members. Unions may legally use any number of misleading tactics to win worker support. Some organizers rely on aggressive sales tactics such as “SPIN selling.” SPIN stands for Situation, Problem, Implication, and Need payoff–the four emotional states through which organizers lead employees in order to secure a signed union-authorization card. Through it organizers persuade workers that a union will solve their problems at work—whether or not a union could actually help. Unions also train organizers to avoid the potential downsides to unionization, like strike histories or dues increases.

Employees only get the full story when they hear from management. Employers are the ones who explain that unions often do not achieve their promised wage increases but always take 1-2 percent of wages in dues. Employers point out patterns of union corruption and clauses in union constitutions that levy stiff fines against workers who stray from union rules. [“Obama’s NLRB Pushes ‘Snap Elections’ for Union Gain,” The Foundry, June 21, 2011.]

Posted on 06/24/11 11:09 AM by Alex Adrianson

Global Warming Lawsuit Goes Down

Everybody emits greenhouse gases. Are we all to be hauled into court?

Not just yet. The strategy of suing over global warming suffered a setback on Monday, as the Supreme Court ruled that public nuisance lawsuits cannot proceed when Congress has already enacted a regulatory scheme to address the nuisance in question.

The case was American Electric Power v. Connecticut. Connecticut, seven other states, and New York City wanted the courts to order five electric power companies to limit their emissions. Justice Ruth Bader Ginsberg, writing for the court, explained that the Environmental Protection Agency not the court is best equipped to deal with global warming:

The expert agency is surely better equipped to do the job than individual district judges issuing ad hoc, case-by-case injunctions. Federal judges lack the scientific, economic, and technological resources an agency can utilize in coping with issues of this order. … Judges may not commission scientific studies or convene groups of experts for advice, or issue rules under notice-and-comment procedures inviting input by any interested person, or seek the counsel of regulators in the States where the defendants are located. Rather, judges are confined by a record comprising the evidence the parties present.

Ginsberg thinks there are better experts than her to decide global warming policy. But there’s an argument for even more judicial modesty, which holds that global warming is an essentially political question that should not be entertained by the courts at all, regulatory scheme or not. For that view, see Laurence H. Tribe, Joshua Branson, and Tristan Duncan’s “Too Hot for the Courts to Handle: Fuel Temperatures, Global Warming, and the Political Question Doctrine,” Washington Legal Foundation, January, 2010. See also Hans A. von Spakovsky’s “Climate Policy by Judicial Fiat: How Global Warming Lawsuits Subvert the Democratic Process,” The Insider, Summer 2010.

Posted on 06/23/11 05:08 PM by Alex Adrianson

Social Media Tips

Last weekend at RightOnline, Mark Meranta of the Institute for Justice provided some good ideas on using social media. We were there and took notes:

• Do cross-promotions with other like-minded groups.
• Lead updates with outrageous facts.
• Create conversations. Ask people to “like” and “share” your posts.
• Use links, pictures, and videos a lot. The algorithm that Facebook uses to determine whether your post will show up in someone else’s news feed—called EdgeRank—gives your content a better score for links, pictures, and videos. More: “EdgeRank: The Secret Sauce that Makes Facebook’s News Feed Tick,” by Jason Kincaid, TechCrunch, April 22, 2010.
• Use the full link when posting videos. You won’t be able to embed the video with link shorteners like
• Post only once or twice per day, and make sure you put your best stuff up.
If you don’t have good content for the day, don’t post.
• Sunday night is prime time for people to check Facebook, so try to have content for that time.
• Learn about using Facebook ads at
• Engage people: Thank them for posting to your page, ask them questions, use tagging, and stay in touch with activists in real life.
Read for more tips and tricks.

• Set up an automatic message thanking people for following you. (And use the full link for your Web site in your “thank you” message.)
• Set up your account so that it automatically follows those who follow you.
• Say “pls RT” when you have something important to say. But don’t abuse it.
• Don’t use up all 140 characters in your posts. Leave enough slack so that your followers can retweet with the usual credit text—e.g., “RT @yourtwittername.”
• Be skeptical of hashtags. They can be overbroad and overused (e.g., “#tcot”).
• Publicly thank people for retweets.
• Tweet @ people to engage them and build brand recognition.

Posted on 06/22/11 04:49 PM by Alex Adrianson

Government Insurance Is Great—Until You Need Care

Kids on Medicaid have a much tougher time getting in to see specialists than those with private insurance, according to a study published last week in the New England Journal of Medicine (“Auditing Access to Specialty Care for Children with Public Insurance,” by Joanna Bisgaier and Karin V. Rhodes). In the study, “secret shoppers,” posing as the parents of a sick or injured child, called 273 specialty practices in Cook County, Ill., to schedule appointments for non-emergencies. Sixty-six percent of those who said they were covered by Medicaid were denied appointment, compared to only 11 percent who said they had private insurance.

The results shouldn’t be surprising. The Medicaid program tries to control costs by squeezing doctor reimbursements. No matter how good-hearted a doctor may be, he still has his own bills to pay, and there’s only so many 40 percent discounts he can give. This chart, from Medicare’s actuary, shows that while it’s tough to be on Medicaid right now, it’s going to get even tougher to be on Medicare as a result of Obamacare.

Another way to look at this graph, is to note that this is one set of assumptions behind Obamacare’s cost saving projections. How likely is it, really, that senior citizens will accept not being able to make a doctor’s appointment without pressuring Congress? Medicare’s own actuary notes:

[I]n our view the scheduled physician payment reduction is implausible and there is a strong likelihood that the productivity adjustments will not be sustainable in the long range. It is reasonable to expect that Congress would find it necessary to legislatively override or otherwise modify the reductions in the future to ensure that Medicare beneficiaries continue to have access to health care services.

Posted on 06/20/11 06:19 PM by Alex Adrianson

Equality Sometimes Conflicts with Liberty

Professor James Otteson explains in this video from the Institute for Humane Studies:

Posted on 06/20/11 06:04 PM by Alex Adrianson

Efficiency Is the Source of Our Prosperity

President Obama thinks our economy should get less efficient. He recently told NBC News that the failure of his stimulus policies was caused by “some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers.” His wrongheadedness continued: “You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.”

Imagine if previous Presidents tried to use the same excuse. Don Boudreaux imagines it:

Pres. Grant, for example, might have grumbled in 1873 about “some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers.  You see it when you go to a bank that uses a modern safe and so employs fewer armed guards than before, or when you travel on trains which, compared to stage coaches, transport many more passengers using fewer workers.”

Or Pres. Nixon might have groused in 1973 about such labor-saving innovation: “You see it when you step into an automatic elevator that doesn’t require an elevator operator, or when you observe that polio vaccination keeps people alive and active without the aid of nurses and all those workers who were once usefully employed making iron-lung machines, crutches, and wheelchairs.”

Do you, Pres. Obama, really wish to suggest that the innovations you blame for thwarting your fiscal policies are “structural issues” that ought to be corrected? [“Open Letter to Barack Obama” Café Hayek, June 15, 2011.]

Posted on 06/17/11 12:29 PM by Alex Adrianson

Doctors Are Fighting the Good Fight

Hal Scherz is one of the heroes in the fight against Obamacare. In 2009, the Atlanta urologist founded the group Docs 4 Patient Care in order to educate the public about the threat that Obamacare poses to the private practice of medicine. For his great work, Dr. Scherz was awarded the Salvatori Prize for American Citizenship at this year’s Resource Bank. One of the organization’s important projects is to encourage its member doctors to take two minutes at the end of patient visits to educate them about health care policy issues. Scherz said:

Some people were appalled that we would do such a thing. The AMA tried to put us on notice, issuing a statement warning doctors not to use their influence in political matters.

I look at this differently. What is more important to people’s health than to understand how the government wishes to control it? I feel that doctors have an obligation to explain this to patients who don’t understand this and wish to learn. And 99 percent of my patients thank me and hug me and wish that more doctors did this.

If you aren’t familiar with the work of Doctor’s 4 Patient Care, take a moment to read or view his Resource Bank talk, both of which are now available online: “Putting Patients in Harm’s Way: A Doctor’s View of Obamacare,” The Heritage Foundation , June 14, 2011. The presentation of the Salvatori Prize begins at about the 25-minute mark of the video for the Resource Bank opening luncheon. Scherz’s lecture begins at about the 32-minute mark. See also our interview with Scherz following the event: The Doctor Becomes a Teacher, Too: Hal Scherz Wins 2011 Salvatori Prize for American Citizenship,”, April 29, 2011.

Posted on 06/17/11 12:07 PM by Alex Adrianson

Spending More and More Money Hasn’t Improved Education

Here’s the explanation:

Posted on 06/16/11 09:48 PM by Alex Adrianson

Education Reform Needs the Profit Motive, Too

The best charter schools don’t always get the most funding. This chart, from a recent paper by Andrew Coulson for the Cato Institute, shows both the grant funding and academic performance at California charter school networks.

The r value for the correlation between grant funding and performance is 0.11, which you stats geeks will recognize as indicating almost no correlation at all. (A value of 1 or -1 means a perfect correlation, while a value of zero means no correlation at all.) In other words, philanthropists are not helping to scale up the successful charter school models. The absence of a profit motive in primary education might have something to do with these results, says Coulson:

Why does the world beat a path to the door of whoever builds a better cell phone or sells a better cup of coffee but not to those who find a better way to teach math or science? What distinguishes educa­tion from other fields, structurally and eco­nomically? … Why has the for-profit Kumon net­work of tutoring schools grown to serve 4 million students in 42 countries, while the nonprofit KIPP, one of the fastest growing charter school networks in America, serves fewer than 30,000? Is it purely a coincidence that in those places where education oper­ates within the free enterprise system it en­joys the replication of success typical of that system?

Coulson’s study is “The Other Lottery: Are Philanthropists Backing the Best Charter Schools?” published by the Cato Institute, June 6, 2011.

Posted on 06/15/11 05:05 PM by Alex Adrianson

Public Education Has Failed in Pennsylvania

From the Commonwealth Foundation, a powerful video making the case for school choice:

Posted on 06/15/11 04:29 PM by Alex Adrianson

Now You Can Find Out What You Missed at Resource Bank!

Building a major gifts program, reforming dysfunctional cities, reestablishing constitutional limits on government, promoting open government, advancing health care freedom, engaging your audiences online—all these topics and more were covered at this year’s Resource Bank. Over 500 conservative leaders, thinkers, and strategists from around the world gathered in Dallas, Texas, to share ideas on how to advance constitutionally-limited government and individual liberty.

Of course, even if you attended, you probably couldn’t take in all the sessions—the laws of time and space being what they are. Fortunately, the goings-on were recorded! On the agenda page for the conference, you can now find links to audio files of each of the panels, as well as video of the luncheon and dinner talks. The pre-dinner talk was delivered by non-presidential candidate Texas Governor Rick Perry, who reminded the audience that Washington isn’t supposed to be the all-powerful, all-knowing, all-spending Oz.” Take a look:

Posted on 06/15/11 02:44 PM by Alex Adrianson

Frost Belongs on the Conservative Bookshelf

Robert Frost, nominally a Democrat and often quoted by President John F. Kennedy, was actually a conservative. And his poetry, writes Amity Shlaes, reflects a number of conservative themes:

It was Frost who wrote of the primacy of promise and contract.

The woods are lovely, dark and deep,
But I have promises to keep.

It was Frost who supplied a tribute to property rights in iambic pentameter in “Mending Wall,” a poem about two farmers walking the line between orchard and wood.

not need the wall
He is all pine and I am apple orchard
My apple trees will never get across
And eat the cones under the pines, I tell him.
He only says: “Good fences make good neighbors.”

It was Frost who penned the best rebuttal to the networking-is-all culture adored by the current stock market, seeing value in isolation.

Join the United States and join the family.
But not much in between unless a college.

It was Frost who versified on private responsibility for the indigent.

Home is the place where, when you have to go there, They have to take you in.

And it was Frost who critiqued political activism in rhyme.

I own I never really warmed
To the reformer or reformed.

[“Missing: One Bard,” Forbes, June 2011.]

For those who want to learn more about Frost’s thought, Shlaes recommends Peter J. Stanlis’s book Robert Frost: The Poet as Philosopher published by ISI Books. You can also find at the Intercollegiate Studies Institute Web site a lecture by Stanlis on “Robert Frost’s War on 20th Century Ideology.”

Posted on 06/14/11 03:31 PM by Alex Adrianson

We’ve Read this Novel Before

The spectacle of waivers to Obamacare regulations, dispensed by criteria known only to bureaucrats so that some may keep health insurance that’s limited and therefore affordable, reminds Dan Mitchell of this passage from a certain work of fiction:

Nobody professed to understand the question of the frozen railroad bonds, perhaps, because everybody understood it too well. At first, there had been signs of a panic among the bondholders and of a dangerous indignation among the public. Then, Wesley Mouch had issued another directive, which ruled that people could get their bonds “defrozen” upon a plea of “essential need”: the government would purchase the bonds, if it found proof of the need satisfactory. There were three questions that no one answered or asked: “What constituted proof?” “What constituted need?” “Essential—to whom?” … One was not supposed to speak about the men who, having been refused, sold their bonds for one-third of the value to other men who possessed needs which, miraculously, made thirty-three frozen cents melt into a whole dollar, or about a new profession practiced by bright young boys just out of college, who called themselves “defreezers” and offered their services “to help you draft your application in the proper modern terms.” The boys had friends in Washington.

That’s from Atlas Shrugged, Ayn Rand’s 1957 novel about what happens when the wealth creators of the world decide to withdraw their entrepreneurial efforts—“go on strike”—because they are tired of the moochers using government to live at their expense. As the number of pages of federal regulation has reached an all-time high, capital appears to be on strike today, too. Corporate cash reserves are unusually high, at $1.91 trillion, according to the Federal Reserve. That’s $1.91 trillion businesses have chosen not to invest.

Posted on 06/13/11 04:05 PM by Alex Adrianson

FEMA Has Been Busy, Even if the Weather Hasn’t

Natural-disaster-wise, President Obama’s time in office hasn’t been exceptional, but you wouldn’t know it from the number of disaster declarations he has made. Matt Mayer reports:

In President Barack Obama’s first two years, the Federal Emergency Management Agency (FEMA) averaged 108 disaster declarations per year. In less than six months, FEMA already has issued 100 declarations in 2011.

The record year remains 1996, when President Bill Clinton issued 157 declarations. If FEMA maintains this pace for the rest of the year, it will exceed 200 declarations and push President Obama’s yearly average to 139 per year. …

[President George H. W.] Bush averaged 43.5 declarations per year, which was 15.4 declarations more than President Ronald Reagan (who finished 15.9 declarations below President Jimmy Carter). President Clinton doubled that average by issuing 89.3 declarations per year. Not to be outdone, President George W. Bush finished his eight years with an average of 129.5 declarations per year, or a new declaration every three days.

Even more astonishing is that President Obama has issued 316 FEMA declarations without one hurricane or 7.0-plus earthquake striking the United States. … President Obama already set the single-year record for major disaster declarations when he issued 81 in 2010—a year devoid of any nationally catastrophic disasters. These benchmarks are nothing more than federalization run amok.

… Every routine natural disaster that FEMA involves itself in diverts finite and vital resources (people, money, time, and supplies) that should be used preparing for a truly catastrophic event that will actually overwhelm state and local governments. [“No Hurricanes or Earthquakes Yet, But FEMA Already Headed for Record Year,” by Matt Mayer, The Foundry, June 6, 2011.]

Posted on 06/10/11 02:46 PM by Alex Adrianson

Lack of Government Services Is No Obstacle for Indian Growth

India has stumbled onto the secret to economic growth, reports the New York Times:

In 1979, the state of Haryana created Gurgaon by dividing a longstanding political district on the outskirts of New Delhi. One half would revolve around the city of Faridabad, which had an active municipal government, direct rail access to the capital, fertile farmland and a strong industrial base. The other half, Gurgaon, had rocky soil, no local government, no railway link and almost no industrial base.

As an economic competition, it seemed an unfair fight. And it has been: Gurgaon has won, easily. Faridabad has struggled to catch India’s modernization wave, while Gurgaon’s disadvantages turned out to be advantages, none more important, initially, than the absence of a districtwide government, which meant less red tape capable of choking development.

The Times paints Gurgaon as a dysfunctional jurisdiction because it has little of the government-provided infrastructure and services taken for granted in the West. But that just means private citizens are providing these things:

To compensate for electricity blackouts, Gurgaon’s companies and real estate developers operate massive diesel generators capable of powering small towns. No water? Drill private bore-wells. No public transportation? Companies employ hundreds of private buses and taxis. Worried about crime? Gurgaon has almost four times as many private security guards as police officers. …

Gurgaon is an extreme example, but it is not an exception. In Bangalore, outsourcing companies like Infosys and Wipro transport workers with fleets of buses and use their own power generators to compensate for the weak local infrastructure. Many apartment buildings in Mumbai, the nation’s financial hub, rely on private water tankers. [“In India, Dynamism Wrestles with Dysfunction,” by Jim Yardley, New York Times, June 8, 2011.]

Posted on 06/10/11 02:27 PM by Alex Adrianson

Saving Animals Is One Reason to Fight Global Warming—Except When It Isn’t

In Australia, they’re talking about culling the camel herd in order to fight global warming, reports The Independent:

Each camel discharges 45kg of methane – equivalent to one tonne of carbon dioxide – every year. With more than million of them in the wild, and their numbers predicted to double every nine years, that represents a lot of climate-changing gas.

Under a plan being mulled by the government, the killing of camels would be officially registered as a means of cutting national emissions. People who helped to reduce the camel population would earn carbon credits, which they could then sell to industrial polluters seeking to offset their own emissions.

As the article notes, the camels, brought to Australia in the 19th century by European travelers, have been loose since the 1920s and are now feral pests. The carbon credit scheme, then, is really just a way of getting paid for what they wanted to do anyway.

In the United States, the non-carbon emitting wind turbines at Altamont Pass in Oakland, Calif., have been slicing endangered Golden Eagles for three decades—killing 67 per year, according to a Los Angeles Times report:

“It would take 167 pairs of local nesting golden eagles to produce enough young to compensate for their mortality rate related to wind energy production,” said field biologist Doug Bell, manager of East Bay Regional Park District’s wildlife program. “We only have 60 pairs.”

There are 5,000 bird-smashing wind turbines across the United States. In spite of subsidies and mandates, wind power makes up only one-half of 1 percent of the energy consumed in the United States, according to the Institute for Energy Research. [h/t: “The Deadly Wind Beneath Their Wings,” Ericka Anderson, The Foundry, June 8, 2011.]

Posted on 06/10/11 01:48 PM by Alex Adrianson

Chrysler Paid Back “Every Dime and More”—Except the Ones It Didn’t

The president’s claims on the auto industry last week involved a little legerdemain, reports Washington Post’s Fact Checker. The President said: “Chrysler has repaid every dime and more of what it owes American taxpayers for their support during my presidency …”

Wait, why would the company pay back more than it owed? The key phrase, notes The Fact Checker, is “during my presidency”:

According to the White House, Obama is counting only the $8.5 billion loan that he made to Chrysler, not the $4 billion that President George W. Bush extended in his last month in office. … Under the administration’s math, the U.S. government will receive $11.2 billion back from Chrysler, far more than the $8.5 billion Obama extended. … Through this sleight-of-hand accounting, the White House can conveniently ignore Bush’s loan, but even the Treasury Department admits that U.S. taxpayers will not recoup about $1.3 billion of the entire $12.5 billion investment when all is said and done. [“President Obama’s Phony Accounting on the Auto Industry Bailout,” Glenn Kessler, Washington Post, June 7, 2011.]

Posted on 06/10/11 11:38 AM by Alex Adrianson

There Will Be Oil

There’s more oil to be had in the Gulf of Mexico than was thought just last week, but it appears the discoveries could have come a year earlier if not for the moratorium on drilling that was ended only by a judge’s order. Exxon has discovered two major reservoirs of oil and one of natural gas in the deep water of the Gulf of Mexico, the company announced Wednesday. The oil discoveries could yield 700 million barrels of oil. That “translates into 14 billion gallons of gasoline and approximately 2 ½ months of current U.S oil production,” says the House Natural Resources Committee.

“Let’s remember that this successful project was approved and moving into location at the time the moratorium was put into place, and sat idle from 2010 through March 2011,” said House Oversight Chairman Darrell Issa. The moratorium on drilling was lifted in October, but that has been followed by a so-called “permitorium” in which permits have been slow in coming. Robert Bluey reports:

New data from Greater New Orleans Inc. last week indicated that deepwater permit issuance from the Bureau of Ocean Energy Management, Regulation and Enforcement is down 88 percent from the previous year’s average. The agency is approving only 0.7 deepwater permits per month.

Even shallow-water permits are down 15 percent from the historical average of 7.1 per month. The administration is currently approving six shallow-water permits per month. [“Huge Oil Discovery in Gulf of Mexico Underscores Importance of Exploration,” The Foundry, June 9, 2011.]

Gas prices, though having fallen recently, remain about a dollar per gallon higher than this time last year.

Posted on 06/09/11 10:31 PM by Alex Adrianson

Some States Are Freer Than Others

The freest states in the country are New Hampshire, South Dakota, Indiana, Idaho, and Missouri, according to the new “Freedom in the 50 States” report put out by the Mercatus Center. Authors William P. Rugger and Jason Sorens constructed an index of freedom that takes into account both economic freedom and personal freedom. The index considers policies such as tax rates, levels of government spending, eminent domain laws, health insurance regulation, alcohol and tobacco regulations, campaign finance laws, asset-forfeiture rules, and more. The least free states in the country, according to the index, are New York, New Jersey, California, Hawaii, and Massachusetts.

Posted on 06/08/11 12:02 PM by Alex Adrianson

City Data Can Be Opened Up, Too

Cities take note: It’s not just state and federal governments that the Web 2.0 geeks are targeting. Open government activists can easily make cities the subject of their designs, too—even medium-sized ones like Tyler, Texas (population 96,900).

Christopher Groskopf, an application developer for the Chicago Tribune, is planning to move to Tyler later this year. But first he wants to bring Tyler’s government into the 21st century by freeing its data. The first task he’s taking on with his HackTyler project it to develop an app that lets users of Tyler’s public transit system look up bus routes and schedules.

He hasn’t built the app yet, but his efforts so far have been fruitful. He writes:

The Tyler Transit agency publishes a route map as PDF, though it only includes a very small number of stops. They publish schedule data for weekdays and Saturdays as PDFs. These PDFs only include estimated arrival times for five stops per route, less than ten percent of the total number of stops. Stop location data isn’t available anywhere online …

Starting with a “a PDF of a scan of a printout of a web application” that the city sent him, Groskopf created his own digital map of the Tyler bus system. After blogging about the progress of his project for The Atlantic, more comprehensive route and schedule information suddenly appeared on the Smith County Web site.

Groskopf also has plans to develop a better app for letting voters find their polling places online. You can follow his progress at or at The Atlantic.

Posted on 06/07/11 01:37 PM by Alex Adrianson

The Bailouts Still Cost

The auto bailouts aren’t quite as low-cost as their supporters make out. David Skeel:

This side of the story rests on the observation that GM’s success in selling a significant amount of stock, reducing the government’s stake, and Chrysler’s repayment of its loans, show that the direct costs to taxpayers may be lower than many originally feared. But this doesn’t mean that taxpayers are off the hook. They are still likely to end up with a multibillion dollar bill—nearly $14 billion, according to current White House estimates.

But the $14 billion figure omits the cost of the previously accumulated tax losses GM can apply against future profits, thanks to a special post-bailout government gift. The ordinary rule is that these losses can only be preserved after bankruptcy if the company is restructured—not if it’s sold. By waiving this rule, the government saved GM at least $12 billion to $13 billion in future taxes, a large chunk of which (not all, because taxpayers also own GM stock) came straight out of taxpayers’ pockets.

The indirect costs may be the worst problem here. The car bailouts have sent the message that, if a politically important industry is in trouble, the government may step in, rearrange the existing creditors’ normal priorities, and dictate the result it wants. Lenders will be very hesitant to extend credit under these conditions.

This will make it much harder, and much more costly, for a company in a politically sensitive industry to borrow money when it is in trouble. As a result, the government will face even more pressure to step in with a bailout in the future. In effect, the government is crowding out the ordinary credit markets.[“The Real Cost of the Auto Bailouts,” Wall Street Journal, June 6, 2011.]

Posted on 06/06/11 05:14 PM by Alex Adrianson

Smart Growth Wasn’t So Smart

You can’t understand the housing collapse of 2008 without understanding the role of “Smart Growth” and other forms of land-use regulation in American cities, says Wendell Cox:

[T]he U.S. housing bubble was not a monolithic event. It varied substantially by geography. Gross national house value increases and losses were overwhelmingly concentrated in metropolitan areas with more restrictive land use regulations — known by a variety of names, such as compact city policy, growth management or smart growth. Many metropolitan areas with these land use restrictions were not able to respond to the increased demand for homeownership caused by the greater availability of mortgage credit. The inevitable result was higher prices, which encouraged speculation and increased house prices even more. …


From the peak of the bubble in 2006 to the Lehman Brothers’ collapse on September 15, 2008, more heavily regulated metropolitan markets accounted for 73 percent of aggregate value losses. The average loss from 2007 to the Lehman Brothers’ collapse was $175,000 per house in the 11 markets with the greatest run-up in prices and the greatest fall. All prescriptively regulated markets (more heavily regulated markets) accounted for 94 percent of losses, or an average of $97,000 per house. Responsively regulated markets (less restrictively regulated markets) lost just 6 percent of their value, or an average of $12,000 per house. [“The Housing Crash and Smart Growth,” published June 2011 by the National Center for Policy Analysis.]

Posted on 06/03/11 04:04 PM by Alex Adrianson

Health Care Costs Still Rise

Obamacare hasn’t yet reduced health care spending. A new report from PricewaterhouseCoopers finds that health care spending increased 7.5 percent in 2010, and is expected to rise by 8 percent and 8.5 percent in 2011 and 2012 respectively. And while rising health care spending isn’t news, Obamacare—the law that was supposed to lower health care costs—is part of the reason increases are expected. Margot Crouch and Kat Nix summarize the PwC report:

Even steeper rises in the cost of private insurance are possible, due to Obamacare’s reductions in Medicare payment rates and its expansion of the Medicaid program. PWC writes, “Hospitals and health plan executives agree that when Medicare and Medicaid pay less than costs, private payers must make up the difference.” The new law will cut provider payment rates across the board, which Medicare’s Chief Actuary warns could cause 15 percent of hospitals, skilled nursing facilities, and home health agencies to become unprofitable by 2019. As more Americans enroll in Medicaid in place of other forms of coverage, providers will face lower reimbursement for a greater number of patients. According to the report, the impact of these changes will likely mean greater cost-shifting to privately insured patients—indirectly increasing premiums. [“New Study Shows Higher Health Care Costs under Obamacare,” The Foundry, May 26, 2011.]

The PwC report is Behind the Numbers: Medical Cost Trends for 2012,” published May 2011.

Posted on 06/03/11 03:27 PM by Alex Adrianson

Remember the Victims of Communism

The more than 100 million victims of Communism will be remembered next Thursday at the fourth anniversary dedication of the Victims of Communism Memorial. Thomas Marsh, sculptor of the Memorial; Aldona Wos, former Ambassador to Estonia; and Annette Lantos, Chairman of the Lantos Foundation will give remarks. Ambassadors from more than a dozen formerly communist nations, along with the leaders of American-based groups representing the captive nations of Cuba, China, North Korea, Vietnam, and Laos, will lay memorial wreaths.

The event begins at 10:00 a.m. at the Memorial, which sits where Massachusetts Avenue, New Jersey Avenue and G Street intersect in northwest Washington, D.C.

Posted on 06/03/11 03:12 PM by Alex Adrianson

Europe Cares What Americans Think

The European Union spends millions in the United States trying to make Americans think well of the European Union and make them think more like Europeans on controversial issues like the death penalty, climate change, the international criminal court, and detaining terrorists at Guantanamo Bay.

Sally McNamara of The Heritage Foundation tallied EU spending in the United States from 2007 – 2009. She found that the EU gave $3.1 million to five U.S. organizations devoted to anti-death penalty campaigning; $2.8 million to 11 U.S. think tanks to study “closing of the Guantanamo Bay detention facility; promoting the sustainability of the euro; and making climate change a priority in underprivileged U.S. communities”; $5.7 million to U.S. colleges and universities to teach about the European Union; $2.7 million to U.S. non-profits to participate in its “Getting to Know Europe” program; and $1.41 million to promote the work of the international criminal court.

McNamara’s report is “Swaying American Opinions: Congress Should Investigate EU Advocacy in the United States,” published by The Heritage Foundation, May 16, 2011.

Posted on 06/03/11 02:58 PM by Alex Adrianson

The 21st Century Battlefield

The United States still needs to think more clearly about strategy for countering stateless militaries, such as Hezbollah, Al Qaeda, and Sudanese pirates, says Rep. Allen West:

Posted on 06/03/11 12:47 PM by Alex Adrianson

United States Hurts Its Own Companies with Anti-Dumping Laws

U.S. laws intended to fight “unfair trade” are actually hurting U.S. competitiveness, says Daniel Ikenson:

During the decade from January 2000 through December 2009, the United States imposed 164 antidumping measures on a variety of products from dozens of countries. A total of 130 of those 164 measures restricted (and in most cases, still restrict) imports of intermediate goods and raw materials used by downstream U.S. producers in the production of their final products. In all of those cases, trade-restricting antidumping measures were imposed without any of the downstream companies first having been afforded opportunities to demonstrate the likely adverse impact on their own business operations. This is by design.

The resulting higher input prices, says Ikenson, give many foreign firms a cost-advantage over U.S. producers, both in the United States and in foreign markets.

As a consequence, countless U.S. producers in downstream industries—including firms that were once thriving in the United States and foreign markets—have suffered severe losses, contraction, and bankruptcy.

As a final indignity, many U.S. exporters suffer the wrath of foreign antidumping restrictions and other forms of protectionism that are often the result of persistent U.S. opposition to antidumping reform, as well as outright retribution for specific U.S. antidumping actions. Among the victims are U.S. exporters to China of automobiles, fiber optic cable, chicken, grain, and paper.

See Ikenson’s paper, “Economic Self-Flagellation: How U.S. Antidumping Policy Subverts the National Export Initiative,” published by the Cato Institute, May 31, 2011.

Posted on 06/03/11 11:40 AM by Alex Adrianson

The World Taxman Cometh

The Organization for Economic Cooperation and Development continues to pursue its agenda of “harmonizing” tax codes (read: shielding high-tax jurisdictions from losing their tax base). Dan Mitchell reports that at the recently concluded Global Tax Forum in Bermuda, the OECD has “unveiled a new scheme that effectively would result in the creation of something akin to a World Tax Organization”:

The vehicle for this effort is a Multilateral Convention on Mutual Administrative Assistance in Tax Matters. This may sound dry and technical, but the OECD wants all nations to participate in this pact, which has existed for a couple of decades but was radically expanded last year to give high-tax governments sweeping new powers to impose bad tax law on income generated in low-tax jurisdictions.

But the real smoking gun is that the OECD has put itself in charge of a “co-ordinating body” that will have enormous powers to interpret the agreement, modify the pact, and resolve disputes – thus giving itself the ability to serve as judge, jury, and executioner. [“With the Support of the Obama Administration, Paris-Based OECD Now Wants De Facto World Tax Organization as Part of its Anti-Tax Competition Campaign,” International Liberty, June 1, 2011.]

American taxpayers, says Mitchell, can expect higher taxes, as the competition to attract businesses with lower taxes would be undermined; individual taxpayer data falling into the hands of repressive and corrupt regimes such as Azerbaijan, Moldova and Mexico which have already agreed to the multilateral convention; a loss of sovereignty, as the convention “outlaws certain pro-growth tax policies and discourages others” while creating “a system allowing foreign tax collectors to cross borders”; and “an assault on all forms of tax planning, with American companies almost sure to be among the first to be in the OECD’s crosshairs.”

Posted on 06/01/11 07:54 PM by Alex Adrianson

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