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InsiderOnline Blog: July 2008

Looking for an Army of Davids to Expose Pork

The Media Research Center is teaming up with the Porkbusters coalition on a new project to highlight examples of egregious pork barrel spending around the country. According to Citizens Against Government Waste, there were 12,000 pork-barrel projects in the 2008 federal spending bills, costing taxpayers $17.2 billion.

MRC and the Porkbusters want to recruit citizen journalists to produce video reports from the sites of the worst of those projects. MRC plans to publish the videos through its recently launched video hosting service, Eyeblast TV. Participants can use their own video equipment, or they can get a free Flip pocket camcorder (worth $150) from Eyeblast TV. Travel expense to assigned reports will also be covered.

The best videos will also be showcased at the Americans for Prosperity’s Defending the American Dream Summit, being held in Washington, D.C., this October. To apply to be part of “Porkbusters on Patrol,” contact Danny Glover at dglover@mediaresearch.org.  

And if you are looking for pork to report on, Citizens Against Government Waste’s Pig Book is a good place to start.

Posted on 07/30/08 03:27 PM by Alex Adrianson

The Cost of Gore’s Vision

How much will it cost to fulfill Al Gore’s grandiose vision of producing 100 percent of our electricity from renewable sources within the next 10 years? Calculating roughly, Ron Bailey says $300 billion annually for the next 10 years would be a low-end estimate of the cost. Bailey puts that into perspective:

According to the Brattle Group consultancy, “new and replacement generating plants will cost about $560 billon through 2030, absent a significant expansion of energy efficiency programs or new climate initiatives.” That comes to an average of about $25 billion per year over the next 22 years. Gore’s proposal is a “new climate initiative” that aims to spend twelve times more than the utility industry would otherwise annually invest in new and replacement generating capacity. Gore explicitly likens his scheme to NASA’s Apollo program, but reaching the moon cost only $150 billion (in current dollars) spent over eight years. In other words, getting to the moon cost half of what Gore wants to spend annually to realize his no-carbon energy vision.

Posted on 07/29/08 05:27 PM by Alex Adrianson

Emissions Targets Won’t Work

Global targets for greenhouse gas emissions, says Iain Murray, cannot prevent global warming because they engender a North-South conflict over how the burden of emissions reductions should be apportioned. Developing countries insist that they should not be denied the opportunity to catch up using the same, cheap fossil fuels that allowed the developed countries to grow. Meanwhile, developed nations rightly point out that no reductions are possible without a commitment by developing countries to reduce emissions, too. All in all, it’s a Gordian knot, says Murray, that can only be sliced through by emphasizing economic growth.

We should be thinking not so much about targets for emissions reduction but, under what circumstances such reductions would become attractive enough that they would be uncontroversial.

First, the developing world would need to be developed enough for its citizens to value environmental improvement (in the language of the economic literature, they will need to have passed through the “environmental transition.”) This requires growth. Secondly, the developed world will need to have demonstrated that “clean energy” technology can be cost-effective. It has yet to do this in any meaningful sense.

Until these two conditions are met, emissions reduction targets are not a credible way of managing global warming risks, but a recipe for impasse. Instead, we should look to mitigating potential consequences, by investing more in adapting to a changing climate and by increasing the resiliency of the global economy, which, once again, requires growth.

Posted on 07/29/08 04:16 PM by Alex Adrianson

Fannie and Freddie: Bad Ideas Long Before Talk of Bailouts

“[T]hat Fannie and Freddie are effectively insolvent is almost beside the point,” writes John Tamny. “We should expect that from institutions whose successes are private, but whose losses are shared by the public.” The bigger problem with the two housing giants, he says, is that their government backing—formerly implicit, now explicit—has encouraged overinvestment in housing. “What will never be known is how many Microsofts and Googles were strangled at infancy due to capital that was consumed in the housing market as opposed to making its way to job-creating businesses and entrepreneurs.” But, says Tamny:

… the story gets worse. With U.S. residential property worth just south of $21 trillion (easily exceeding the total stock-market worth of all public companies) as of last year thanks to land-use rules, its preferred status among our leaders in Washington, and the ever weakening dollar, it is increasingly the main source of wealth for most households. This is problematic from an asset diversification standpoint, particularly during times of housing uncertainty, but it’s most enervating for keeping many Americans stationary in an economy that is not.

Sure enough, with some Americans logically reluctant or unable to unload what might be their best investment, many feel the need to stay in one place despite the fact that capital moves at lightning speed, and with very little regard for the past residential choices of most Americans. No doubt many residents of Michigan and Ohio would like to move where economic opportunity is greater, but home ownership has become the proverbial ball-and-chain that makes following capital and opportunities difficult.

Heritage’s David John has proposed that Fannie Mae and Freddie Mac be broken up and truly privatized. See “Congress Should Fix the Fannie Mae and Freddie Mac Mess,” by David C. John, The Heritage Foundation, July 15, 2008.

Posted on 07/29/08 03:29 PM by Alex Adrianson

Already Known to Economists … but Not to the Democratic Policy Committee

We’re willing to bet that no member of Congress is a regular reader of The Energy Journal, though perhaps some of them should be. It’s an academic journal on energy economics. But maybe leaders on Capitol Hill should start with something The Energy Journal decided not to publish: a paper finding that current prices for oil are influenced by expectations of future production.

That’s actually a topic Congress is debating right now. In response to $4 per gallon gasoline, many Republicans want to allow more exploration and drilling for oil on public lands. Democrats are opposed because opening up the oil spigot runs counter to their idea that the national economy needs to be shoehorned into a clean energy paradigm. In service to that position, Democrat leaders in Congress have made use of the argument that opening up public lands will have no impact on current prices for oil—and thus the retail price of gasoline—for at least 10 years. It takes that long, they say, for a new source to be developed into a producing well.

To believe that argument, you would have to believe that oil producers do not try to anticipate future market conditions (i.e., that they don’t speculate!). The contrary theory holds that if oil producers do expect oil production to increase in the future, and thus prices to decline in the future, then producers become more willing to sell oil from existing sources at today’s higher prices. They respond by increasing production from wells already in operation. Thus, opening up the Alaskan National Wildlife Refuge today, would have some price impact today, even though oil from ANWR may not reach the market for another decade.

So along comes a paper by R. Morris Coats and Gary Pecquet, titled “The Effect of Opening up ANWR to Drilling on the Current Price of Oil” finding that, indeed, expectations of higher production in the future does reduce prices today. The Energy Journal rejected the paper. Why? The editors wrote the authors:

Basically, your main result (the present impact of an anticipated future supply change) is already known to economists (although perhaps not to the Democratic Policy Committee). … It is our policy to publish only original research that adds significantly to the body of received knowledge regarding energy markets and policy.

If congressional leaders want the price of gas to remain high, then they should say that is their goal rather than employ silly arguments. Only on Capitol Hill is it controversial to suppose that people attempt to anticipate the future.

Posted on 07/29/08 11:57 AM by Alex Adrianson

This Week in Washington: Military Voting, Senate Voting, Oil Prices

Posted on 07/28/08 06:04 PM by Alex Adrianson

Celebrate Milton Friedman’s Birthday

Thursday of this week is the 96th birthday of one of the 20th century’s greatest advocates of individual liberty, Milton Friedman. A number of groups around the country plan to mark the occasion with special events. If you have a chance, you should see if you can attend one of the events. Groups hosting events include Friedman Foundation for Educational Choice; Alabama Policy Institute, America’s Future Foundation, Competitive Enterprise Institute, and The Heritage Foundation; Cascade Institute; Ethan Allen Institute; Georgia Public Policy Foundation, Black Alliance for Educational Options, and Center for an Educated Georgia; Grassroot Institute of Hawaii; Heartland Institute; Independence Institute; John Locke Foundation; Maryland Public Policy Institute; Maine Heritage Policy Center; National Taxpayers Union; PERC; Pioneer Institute; Platte Institute; Tennessee Center for Policy Research; and Texas Public Policy Foundation.

Posted on 07/28/08 05:55 PM by Alex Adrianson

What’s Worse for Health: Cooling or Warming?

At Cato-at-Liberty, Indur Goklany points to a recent article in Inside ARM (Inside Accounts Receivable Management) that warns about the impact of hotter weather on the level of hospitals’ bad debt. Citing data from the Agency for Healthcare Research and Quality, the article says hotter weather may increase the number of uninsured patients needing treatment for heat exposure and exhaustion. According to AHRQ, 6,200 people nationwide were admitted to community hospitals needing treatment for heat exposure in 2005.

Later in the article, the author mentions that the same AHRQ report finds that 6,500 people were admitted to community hospitals needing treatment for exposure to extreme cold in 2005. It takes longer to treat people for exposure to extreme cold than for exposure to extreme heat, which means that the cost of treating exposure to extreme cold are higher than the costs of treating exposure to extreme heat. The 6,500 cold-related visits cost community hospitals $81.3 million in 2005, while the 6,200 heat-related visits cost community hospitals $38.4 million in 2005.

It seems, then, that global cooling would be a bigger problem than global warming—for both people and collection departments. 

Posted on 07/28/08 04:12 PM by Alex Adrianson

Gore’s Global Warming Plan Not in Touch with Reality

Samuel Thernstrom has some issues with Al Gore’s 10-year plan to shift the U.S. economy to non-carbon-emitting sources of energy:

… the real challenge of climate change lies in the scale of the problem. It is relatively easy to make very modest reductions in emissions; in the short term, it is virtually impossible to cut them deeply enough and quickly enough to actually stop warming. We can save money and cut emissions by picking the low-hanging fruit—taking advantage of opportunities to eliminate waste and conserve energy. That is happening, and it will continue. But when that’s done, we will still need to climb the biggest tree imaginable and pick it clean if we want to curtail warming—and that is not going to be an economical proposition in the immediate future, no matter what Gore tells you. No government policy could make it so. Honesty about these costs is a prerequisite to any serious conversation about whether they are justified.

Gore promises that switching to renewable energy sources will save us from high energy prices—conveniently ignoring that renewables cost more than the high-carbon content fuels that Gore wants to eliminate. You don’t make energy cheaper by eliminating the most abundant and affordable sources of it. It is not possible to cut the cost of energy by shutting down every power plant in the country that runs on the cheapest, most abundant, domestically available fuel—coal (which generates 49 percent of our electric power)—as well as the second largest source of the same, natural gas (20 percent). Prematurely retiring more than $500 billion worth of energy infrastructure is not the key to renewed economic growth, to say the least. It couldn’t be done, but if it were attempted, it would cause economic ruin. If America thinks that this is really what climate policy demands—and what it promises—it may well decide it prefers the Bush approach after all. Which, come to think of it, is exactly what happened the last time that Gore controlled climate policy.

Posted on 07/28/08 11:55 AM by Alex Adrianson

Obama’s Social Security Tax Plan Would Make Us Poorer

Dan Mitchell: Democratic Presidential candidate Barack Obama wants to fix Social Security’s long-run fiscal imbalance by extending Social Security taxes to higher levels of earned income. It’s a plan that would make Social Security more like a welfare program. It would also make the private sector $5 poorer for every $1 in additional tax revenue raised. And it would only close the funding gap by about one-third.

Posted on 07/28/08 10:53 AM by Alex Adrianson

Confabbing Conservatives Talk Technology

Many people think that the Left is way ahead of the Right in online organizing. That may be true, but the Right is fighting back. Or, at the very least, we can say that some in the conservative movement are pushing the message that the Right needs to fight back.

It’s a message that’s getting an audience here in Austin, Texas. That’s where Americans for Prosperity and RightOnline are hosting the Defending the American Dream Summit. Day one’s sessions focused on how conservatives can make better use of new media technologies.

The audience was very receptive. There’s a good Texas contingent, of course, but we’ve met folks from other parts of the country, too, who have come to learn more. Most interesting of all was seeing how many older folks came to learn from the young technology whizzes on the panels.

The Heritage Foundation’s Center for Media and Public Policy offered its class on Computer-Assisted Research and Reporting (CARR). Also, a session we particularly enjoyed was the Media Research Center’s discussion of how new media technology is more than just an alternative to old media: It’s a check on the bad reporting of the old media. MRC’s Dan Gainor led the session. He pointed out that there is a critical difference between conservative media critics and Lefty media critics: Conservative critics want the media to be fair and balanced; many Lefty critics, on the other hand, just want to expunge conservative thinking from the media. That’s why it is critical for conservatives to fight back on the net.

The most enthusiastic speaker on day one, however, was definitely Ralph Benko. Benko thinks we are at “the inflection point of a revolution.” We think that means big things are about to happen on the Internet and now is a good time to get involved. Benko is also optimistic that conservatives will eventually make better use of the Web than liberals. Conservatives, he says, love technology and they love breaking down elitist barriers.

We have one tiny, tiny quibble: Some of the sessions seemed to devolve into discussions of whether Sen. John McCain was making effective use of Internet tools, and what conservatives could do to help him. We think better questions are: What will John McCain do to help conservatives? And: How can conservatives make sure McCain and other politicians see the wisdom of conservative ideas?

Posted on 07/18/08 11:07 PM by Alex Adrianson

The Coming Week – Monday, July 21, 2008

Some events that caught our eye:

Monday
ASSESS the economy. The American Enterprise Institute hosts a panel discussing recent research finding that recessions driven by asset-price bubbles and credit crunches—two conditions facing the economy today—tend to be longer and deeper than other recessions.

Tuesday
GET the latest on abstinence education and programs from the 2008 Abstinence Clearinghouse Leadership Conference.
EXAMINE whether the U.S. Citizenship and Immigration Service can find a solution to its backlog of applications for citizenship. Host: The Heritage Foundation
HEAR the case for continuity in U.S. foreign policy after Bush. The Hudson Institute hosts authors Timothy Lynch and Robert Singh.

Wednesday
LOOK beyond the usual options for health care reform. The American Enterprise Institute hosts a conference examining policy ideas to promote healthier behavior, health literacy, skill formation, improved decision-making, and more efficient health care delivery.

Thursday
FIND OUT what makes America distinctive. The Cato Institute hosts author George Will.
LEARN about the fundamental principles of self governance at the 9th Annual Freedom 21 National Conference.

For more events see InsiderOnline’s Conservative Calendar.

Posted on 07/17/08 01:46 PM by Alex Adrianson

This Week at Heritage

How Muslim societies engage the ideas of individual liberty and religious freedom will play a critical role in the war against Islamic terrorism. … Bulgaria’s adoption of the flat tax gives it an opportunity to become the new economic miracle in Europe. … Bruce Herschensohn has a novel about the last days of the war against Islamic terrorism. … Admiral Timothy J. Keating has some thoughts on China and Taiwan. … Ireland’s “No” on the Lisbon treaty was a brave vote against the aggrandizement of an undemocratic and unaccountable European Union bureaucracy.

Posted on 07/17/08 01:42 PM by Alex Adrianson

Congress Takes Away Seniors Choices

On Tuesday, the part of Medicare that gives senior citizens private health care options—Medicare Advantage—was cut in order to pay for tinkering with the traditional Medicare set-up. In other words, patient choice was sacrificed to protect Medicare’s central planning. This maneuver was accomplished when Congress overrode President Bush’s veto of the so-called Medicare Improvement for Patients and Providers Act of 2008, which averts a scheduled cut in doctors’ fees. As John Goodman explains very well, averting these cuts is a regular drill that Congress must go through because Congress pretends it can control growth in Medicare without actually controlling what doctors do:

• Even though health care spending has been growing at twice the rate of growth of our income since the day Medicare began, the government doesn’t want Medicare to grow any faster than income.

• So it sets the price of every service it pays for and allows increases from year to year no greater than national income growth.

• But, although the government controls prices, it does not control quantities; and doctors respond to price controls by expanding the number of services (more MRI scans, more blood tests, etc.)—all of which keep total spending growing at two times the growth rate of national income.

• So to punish the doctors for not following the government’s plan, the law requires Medicare to reduce doctor fees to keep overall spending on course.

• However, anti-trust law does not allow doctors to collude; and since individual doctors in no way control the collective outcome, they are being punished as individuals for outcomes they cannot possibly control, regardless of how they practice medicine.

• Members of Congress feel sorry for (and pressured by) doctors who are indiscriminately punished in this way, and they periodically override the law and raise doctor salaries back up to the level at which health care spending continues to grow at twice the rate of growth of income.

No doubt Congress should be concerned about getting doctors’ fees right. Nevertheless, the impact of the bill is a reduction in benefits for seniors in the Medicare Advantage program. Medicare Advantage it is a better program that traditional Medicare because it gives seniors more choices and better value. In a recent Heritage Foundation paper, Robert Moffit writes:

The plans in Medicare Advantage have proved their worth. As of 2005, they provided lower copayments and deductibles for the required Medi­care-covered services; sensible out-of-pocket limits on medical spending for certain benefits; more gen­erous drug benefits than are generally available through the combination of traditional Medicare and a prescription drug plan; coordination of care for chronic illnesses including heart disease, diabe­tes, lung disease, and cancer; nutritional, wellness, and preventive benefits; and dental and vision ben­efits.There is some preliminary evi­dence—such as data in reported in The Journal of the American Medical Association, the Archives of Internal Medicine, and The American Journal of Public Health—that Medicare Advantage patients are receiving care superior to that provided to patients in traditional Medicare. In a summary review of these findings, researchers at America's Health Insurance Plans, a national trade association with nearly 1,300 member companies, report that Medi­care Advantage plans outperform traditional Medi­care in providing beta-blockers after heart attacks, breast cancer screening, immunizations for the flu, and diabetes testing. Medicare Advantage patients were also less likely to have late-stage cervical and breast cancer diagnoses.The GAO recently found that more than nine in 10 health plans submitted bids that were lower than the government's bench­mark and returned these savings to seniors in the form of lower costs. According to the GAO, 91 per­cent of those plans got an average rebate of $87 per member per month, and 89 percent of those rebates were returned to beneficiaries as lower copayments and coinsurance, as well as premium reductions. … Eleven percent of the rebate payments went to Medi­care beneficiaries in additional health care benefits that are not covered by traditional Medicare.  

Currently, more than 9 million seniors are enrolled in Medicare Advantage. The Congressional Budget Office estimates that the cuts will reduce enrollment by about 2.3 million.

Posted on 07/17/08 01:38 PM by Alex Adrianson

Heading to Austin!

We hear that Austin, Texas, is politically a pretty liberal town. It might be a little more conservative this weekend, however. We’ll be there for what looks to be an exciting Defending the American Dream Summit. It’s being put on by Americans for Prosperity and RightOnline. A particular focus of this conference is how conservatives can use new media to advance public policies based on liberty. We’ll send updates from the conference, and maybe even see some of you down there.

Check the agenda.

Posted on 07/17/08 12:22 PM by Alex Adrianson

Iran’s Missiles

Jim Phillips: Iran’s ballistic missile tests were an exercise in brinksmanship that should have everybody concerned. Iran’s missiles can now reach Egypt, Turkey, and Greece.

Posted on 07/17/08 11:58 AM by Alex Adrianson

Cost of Government Day

Today is Cost of Government Day, which is four days later than last year’s Cost of Government Day. Unfortunately, that means government got bigger in the past year.

Calculated every year by Americans for Tax Reform, Cost of Government Day is the day of the year on which Americans have earned enough to pay for the annual cost of government. And the cost of government includes not just the resources government commands directly—government spending—but also the resources government controls indirectly through regulation.

Cost of Government Day is great way of illustrating the real burden of government, especially the burden of regulations which is often harder to see than government spending. According to ATR, federal spending represents a burden of 84 days of work, and federal regulations are a burden of 42 days of work. State and local spending are a burden of 50 days, while state and local regulations are a burden of 21 days. So all together, the average American must work 197 days to pay for his share of the total burden of government. That’s represents 53.0 percent of national income.

Since 2000, Cost of Government Day has shifted back from June 29.

For more information, see ATR’s “Cost of Government Day 2008 Report,” by Peter Ferrara, July 16, 2008.

Posted on 07/16/08 03:59 PM by Alex Adrianson

Whence Do Fannie and Freddie Come?

As we behold the spectacle of Fannie Mae and Freddie Mac needing a government lifeline in order to avoid dragging down the entire world economy, it’s worth pointing out that these two government-sponsored enterprises have their origins in unwise regulatory policies of the past. Tom Firey at Cato-at-Liberty has a post reviewing the history of Fannie and Freddie, and he points out that Fannie Mae’s creation in 1938 was a second-best solution to a problem created by government regulations:

State regulation kept banks small and geographically limited in order to make them better targets for taxation and political manipulation. As a result, banks could not geographically diversify their loan risk, leaving them highly vulnerable to localized economic downturns. Because they lent money (as mortgages and business loans to farms and other firms) to local borrowers for long periods of time but they had to honor local depositors’ withdrawal requests, banks were often one bad harvest and one bank run away from insolvency. For that reason, they shied away from financing long-term home loans.

Fannie Mae (formally, the Federal National Mortgage Association) provided badly needed lubricant to the mortgage industry. It purchased loan obligations from banks, putting money back in the banks’ vaults and making that money available for more home loans.

To round out the brief history, in 1968 Fannie was sold off to private investors but retained its special privileges, including the implicit (now explicit) backing of the federal government. In 1970, Congress created Freddie Mac to compete with Fannie Mae and prevent Fannie Mae from monopolizing mortgage securitization. Freddie Mac was given the same structure and privileges as Fannie Mae.

In 1999, Congress reformed the banking laws to allow banks to diversify geographically. Thus, the problem that called for Fannie Mae’s creation in 1938 no longer exists today.

Posted on 07/15/08 04:12 PM by Alex Adrianson

Break Them Up!

The Heritage Foundation’s David John suggests a solution for making sure Fannie and Freddie are never again allowed to hold the world economy hostage:

Congress should look at breaking up both [Fannie Mae and Freddie Mac]. A larger number of smaller entities could compete with each other without artificially dominating the market. In other words, let's bring real capitalism to the housing-securitization markets.

The new companies would be owned by private stockholders and overseen by a regulator with enough teeth to ensure that they're safely run. They could be bought, merged or even go out of business without the potential disruption that this crisis caused. Most important, they wouldn't have the potential to bring housing lending to a screeching halt, or potentially required multibillion-dollar taxpayer bailouts.

The Cato Institute’s Gerald O’Driscoll proposes a similar idea. See “End the Mortgage DuopolyWall Street Journal, July 15, 2008.

Posted on 07/15/08 04:06 PM by Alex Adrianson

Those Who Do Not Learn from History …

The travails of Fannie Mae and Freddie Mac are, says Peter Wallison, “a cautionary tale about the moral hazard created by government support for private institutions – a tale we saw played out in the S&L debacle less than 20 years ago, and one we may be about to inflict on ourselves again.”

Unfortunately, there’s no evidence that our leaders are learning from that cautionary tale. Wallison notes:

In the same week when it became apparent that implicit government backing has made the U.S. hostage to the health of two companies that grew out of control, Messrs. Bernanke and Paulson told Congress that they wanted a new regulatory structure for investment banks like Bear Stearns.

In this plan, the Fed would have supervisory authority over these companies and oversee a formal system for their “orderly liquidation.” The only reason the Fed might want to regulate the investment banks is that it believes itself to be somehow at risk. The markets, ever clear-eyed, will read this for what it is – potential Fed backing if the big investment banks get into trouble. In other words, we are now proposing to introduce a government-created moral hazard into investment banking. The resulting loss of market discipline will replicate the experience with the S&Ls and Fannie and Freddie.

Posted on 07/14/08 04:19 PM by Alex Adrianson

Honoring Pro-Life Work

Ericka Anderson reports that a new prize has been established for pro-life activism:

Life Prizes is a new program designed to reward a broad range of pro-life movers and shakers by providing $600,000 in prize money split between up to six winners annually.

The Gerard Health Foundation, which sponsors the contest, unveiled its project Tuesday and opened the door for nominations by individuals and organizations specifically chosen to seek out worthy competitors.

After 20 finalists are narrowed to six or less by a panel of prominent judges, an awards ceremony will be held (simultaneously with the Students for Life of America’s annual conference), just after the March for Life in Washington, DC. Up to six individuals may win the prize but one outstanding person could win the entire $600,000 if the judges don’t find others worthy of sharing it.

The first awards will be announced in 2009.

Posted on 07/11/08 02:46 PM by Alex Adrianson

The Coming Week – Monday, July 14, 2008

A few events that caught our eye:

Tuesday
EXAMINE the most significant environmental issues of the day. The Washington Policy Center hosts its annual policy conference on the environment, featuring a luncheon address by Bjorn Lomborg.
LEARN how the Irish blocked EU aggrandizement. The Heritage Foundation hosts Declan Ganey, the leader of Irish opposition to the Lisbon Treaty. 
COMPARE the economic platforms of presidential candidates John McCain and Barack Obama. Host: Cato Institute.

Wednesday
FIND OUT if libertarians and traditional conservatives will continue to form a conservative coalition in the future. The Goldwater Institute hosts a panel featuring David Boaz, Executive Vice President of the Cato Institute and author of The Politics of Freedom; Mickey Edwards, former Member of Congress and author of Reclaiming Conservatism; and Al Regnery, publisher of The American Spectator and author of Upstream: The Ascendance of American Conservatism.
SEE The Birth of Freedom. The Heritage Foundation hosts a screening of the Acton Institute’s new documentary tracing the historical development of the principles of liberty and freedom.

Thursday
CONFAB with fellow freedom lovers at Niagara-on-the-Lake, Ontario. The Atlas Experience, organized by the Atlas Economic Research Foundation, includes enlightening lectures, fine dining, intimate discussion salons, and refreshing local tours.
EXAMINE some new ways to measure the outcomes of grants for public policy advocacy. Host: Hudson Institute.
FIND OUT what conservatives should do about the fact that the Left controls the institutions of higher education. Host: America’s Future Foundation

Friday 
EXPLORE how new media can help redefine the citizen’s role in public policy. Americans for Prosperity holds its two-day Defending the American Dream Summit in Austin, Texas.

For more events, visit InsiderOnline’s Conservative Calendar.

Posted on 07/11/08 10:49 AM by Alex Adrianson

This Week at Heritage

The Supreme Court’s 2007 term has produced important decisions on gun rights, the rights of military detainees, voter ID laws, the death penalty, punitive damages, and the applicability of international law in the United States.

Posted on 07/11/08 10:17 AM by Alex Adrianson

Health Insurance’s Berlin Wall

One reason health insurance costs so much is that state legislators are still convinced they know better than consumers what consumers want. Daniel Graham of the Pacific Research Institute sums up the latest data on the extent of state government mandates on health insurance plans:

In 2007, there were 84 separate benefit mandates in force in at least three states. In total, there were 1,594 state laws, averaging out to 32 mandates per state. This marks a significant increase from 1979, when 252 mandate laws were in force—an average of only five per state. The pace has now picked up again. Among the benefit mandates introduced since 2000 are: hearing aids, hormone replacement therapy, and reimbursement for clinical trial participation. In 2007, soon after it was introduced, 13 states mandated coverage for the human papillomavirus vaccine.

One way of getting around this problem would be for Congress to repeal the federal law forbidding health insurance from being sold across state lines. States with excessive regulation would see consumers voting with their feet and buying the health insurance they can afford from out-of-state insurers.

Posted on 07/11/08 10:13 AM by Alex Adrianson

Congress Preserves Medicare’s Socialist Ghetto

On Wednesday, the Senate reaffirmed its faith in centrally planned health care by passing a bill that preserves Medicare’s physician fee schedules while cutting reimbursements for the private plans of the Medicare Advantage program. The bill had already been passed by the House. As Scott Gottlieb of the American Enterprise Institute explains, Medicare’s system of price controls distorts incentives, increases costs, and reduces the quality of care received by seniors:

Under this physician-fee schedule, spending is supposed to remain “budget neutral”: If Medicare adds a new service it will cover, or raises what it pays for an existing service, another service must somehow be cut.

Control of the coding process has become a lucrative side business for the AMA [American Medical Association], via its sales of code books and other related material. Plus, yearly negotiations on changing the fee schedule have given the AMA a permanent role in Washington.

But the system breeds dysfunction—including poor health care. It encourages doctors to deliver care that fits the billing codes—to do listed medical procedures, rather than more mundane and lower-paid, but effective, services like counseling or screening.

It also favors inventing new procedures—because it takes the Medicare price controllers time to ratchet down reimbursement rates on new services. Typically, the newer a procedure, the more Medicare pays for it. (Meanwhile, the overall scheme hasn’t been updated in a decade to account for how technology has really changed medical practice.)

The fight over doctor fees is also a reminder of how, when a big government agency like Medicare tries to “manage” costs, it only adds to health-care inefficiencies and inequities. Medicare trustees say the program has an unfunded liability of $36 trillion over the next 75 years. Price controls, it turns out, aren’t working to keep the program solvent.

Highly politicized price controls have already distorted markets for medical equipment, hospitals and other service providers. It’s just a matter of time before they extend to developers of drugs and devices as well, along with rising costs and reduced quality.

Rules set in Washington, by people insulated from the consequences of their decisions, will increasingly limit the health-care choices of ordinary people.

The alternative? Leave pricing to markets, via competing private plans that cover set benefits for a defined contribution of money.

Posted on 07/11/08 09:40 AM by Alex Adrianson

Remembering a Happy Warrior

We should have mentioned by now that our friends at the National Taxpayers Union had a successful dinner honoring their late President, John Berthoud, who died unexpectedly last year. John was a great advocate for taxpayer interests, as NTU itself continues to be. A number of folks from Heritage attended the event, including our Vice President of External Relations Becky Norton Dunlop. Becky accepted NTU’s Happy Warrior award on behalf of Bridgett Wagner.  

Someone once said Bridgett Wagner does so much to build the conservative movement that there must be ten of her. Alas, there is only one. If there were ten, one of them surely would have attended the dinner for her friend, John. As it was, she was off building coalitions for freedom in Portugal. On behalf of Bridgett and Heritage, we’ll say thanks again to NTU and God bless you, John Berthoud.

Posted on 07/11/08 09:38 AM by Alex Adrianson

Greening the Planet with More Carbon Dioxide

Since nearly everybody’s playbook for dealing with global warming includes cutting carbon dioxide emissions, you might think carbon dioxide is some sort of pollutant. Even the Supreme Court has ruled that it is a pollutant, as understood by the Clean Air Act, anyway. As a result of that ruling, the Environmental Protection Agency is getting ready to unveil a plan to regulate carbon dioxide emissions. Meanwhile, the G-8 just announced it wants to cut greenhouse gas emissions (including carbon dioxide) in half by 2050.

Today, an Investors Business Daily editorial points to evidence making the case that more carbon dioxide is good for plant life on the planet. On Tuesday, for instance, researchers at the Johann Heinrich von Theunen Institute in Germany announced they have found that raising carbon dioxide concentrations to 550 parts per million (significantly higher than today’s levels) increases output by 10 percent for barley, beets, and wheat. Further, scientists Steven Running of the University of Montana and Ramakrishna Nemani of NASA have analyzed satellite data and found that Earth’s vegetation has increased by 6.2 percent over a period of not quite two decades.

Lawrence Solomon, writing about the Running/Nemani findings last month in Canada’s Financial Post, explains:

CO2 is nature’s fertilizer, bathing the biota with its life-giving nutrients. Plants take the carbon from CO2 to bulk themselves up – carbon is the building block of life – and release the oxygen, which along with the plants, then sustain animal life. As summarized in a report last month, released along with a petition signed by 32,000 U. S. scientists who vouched for the benefits of CO2: “Higher CO2 enables plants to grow faster and larger and to live in drier climates. Plants provide food for animals, which are thereby also enhanced. The extent and diversity of plant and animal life have both increased substantially during the past half-century.”

A little more carbon dioxide, it seems, might help address food shortages—another item on the G-8 agenda.

Posted on 07/09/08 12:15 PM by Alex Adrianson

Who’s the Dumb Consumer?

Liberals say health care is just too complicated for individuals to be smart consumers. As compared to what? Here’s some pretty dumb shopping by the government, reported this morning by the Washington Post:

Medicare has paid as much as $92 million since 2000 to medical suppliers who billed the government for wheelchairs and other home equipment purportedly prescribed by physicians who, according to records, were dead at the time, congressional investigators said yesterday.

The Centers for Medicare and Medicaid Services (CMS) honored about 500,000 such claims despite pledging six years ago to correct the problem, which was identified by the Health and Human Services Department’s inspector general in 2001.

In more than half the cases studied, the doctor listed as having ordered the equipment had died more than five years earlier, said a report by the Senate Homeland Security and Governmental Affairs Committee’s permanent subcommittee on investigations.

Posted on 07/09/08 10:35 AM by Alex Adrianson

Porkers’ Priorities

A few items the House of Representatives wants to put on the taxpayers’ credit card, from Citizens Against Government Waste’s recent report on pork in the Commerce, Justice, Science appropriations bill:

$1.35 million for planetarium costs—$1.15 million for Lakeview Museum Planetarium, added by various appropriators from Illinois; and $200,000 for the County College of Morris Planetarium, added by Rep. Rodney Frelinghuysen (R-N.J.);
$700,000 for a large millimeter telescope sitting atop the Sierra Negra, a volcanic peak in Mexico, added by Rep. John Olver (D-Mass.);
$400,000 for horseshoe crab research at Virginia Tech, added by Rep. Rick Boucher (D-Va.); and
$200,000 for research at the American Museum of Natural History to advance environmental literacy through public education in New York, added by Rep. Jerrold Nadler (D-N.Y.).

Overall, CAGW calculates that the House bill contains 1,123 pork projects worth $409.8 million.

Posted on 07/08/08 05:17 PM by Alex Adrianson

Dumpster-Diving Government Lectures Citizens About Waste

Politicians love the proverbial “free lunch,” a way of solving a problem that doesn’t appear to involve any costs. In Britain, politicians have found a new version of the free lunch: This one is literally the lunch that got thrown out. Britain’s government recently released a report claiming that consumers could help fight high food prices if they reduced the amount of food they buy but throw out.

Gosh, why didn’t we think of that? Good advice, nanny state!

The report, commissioned by Prime Minister Gordon Brown, estimates that the British annually spend 420 pounds per household on food that gets tossed into the garbage. Eliminating the waste, says the report, would not only help lower food costs, it would also reduce energy consumption, too. The report says eliminating the waste would be equivalent to taking one of every five cars off the road.

Nobody likes wasting food, but it always happens: Who hasn’t had to clean spoiled food out of his refrigerator now and then? So either we are all irrational or eliminating the waste isn’t quite the free lunch the British government thinks it is. Leftovers happen. Getting bored by leftovers, happens, too. If you opt for a steak at a restaurant even though you have old meatloaf that will only be good to eat for one more night, are you really making a sub-optimal choice? Ideally, policymakers should not base their policies on the assumption that their citizens are irrational.

Rather than hector their citizens about waste, Britain should embrace an agenda of scrapping the developed world’s barriers to trade in agricultural products. That would be a better way of bringing down food prices around the world.

Posted on 07/08/08 04:16 PM by Alex Adrianson

Blame Government, Not the Market for the Food Crisis

Rising food prices, which have pushed millions into poverty and provoked riots around the world, are easily identified as a major global problem. But rising food prices ought to be the solution, too. Rising prices are supposed to signal producers to produce more food, and the increased supply in the long run should bring prices back down. If it’s not working that way, then we should look at government manipulations of the market for possible answers.

As both the American Enterprise Institute and The Heritage Foundation have each pointed out in recent papers, numerous government policies get in the way of an expanding food supply. Among these barriers are tariffs on agricultural imports, restrictions on food exports, subsidies and mandates promoting the use of grain to make ethanol and other biofuels instead of food, subsidies and mandates to leave land fallow, and restrictions on the use of genetically modified seeds that would increase yields. Government restrictions on finding new sources of energy also drive up the cost of both fuel and fertilizer, two major cost factors in food production.

As if those problems weren’t enough, both papers also point out how U.S. assistance to countries facing food shortages is hampered by misguided policies. Instead of providing cash assistance for the purchase of local food, the United States gives assistance only in the form of U.S.-grown grains. AEI’s Adam Lerick notes:

Not only is American aid almost entirely restricted to U.S.-grown and processed crops, 75 percent must be shipped on U.S.-owned vessels that charge some of the industry’s highest prices. The cost of freight frequently equals the cost of the commodities.

In the past, thousands of tons of cereals have been transported by barge along the Mississippi River, packaged into fifty-five-pound bags, loaded onto American ships, navigated across the world, transferred to railroad cars, and delivered by truck in Ethiopia and Uganda while stockpiles of locally produced grain lay rotting only miles from the recipients for lack of a market. Reforming our aid program to be cash-based allows the local purchase of food for distribution in recipient countries. The impact would be the same as doubling our annual spending by $2 billion.

As Lerick points out, the overall consequence of government meddling in agricultural markets is that it takes longer for otherwise clear price signals to induce a supply response:

The developing world cannot fight hunger in the face of a distorted global food market. Agricultural trade barriers on imports and subsidy programs in the United States and Europe dump crops on world markets, depressing prices below international costs of production and forestalling the growth of a healthy farm sector in emerging economies.

In agriculture, even medium-term supply response is slow, thereby amplifying the price increases. Whether in Nebraska or Thailand, farmers who have survived the boom-and-bust cycles of their industry are cautious. It is only after a perceived fundamental shift in demand that output increases.

The mere signal of a reversal of G8 countries’ protectionist policies down the road would immediately increase projections of future food production, lower expectations of future values, and cause prices to start dropping at the neighborhood grocery store by morning.

As the leaders of the G-8 meet this week, they have plenty of options for addressing the global food crisis. Blaming globalization or free markets or financial speculators should not be on the agenda.

SeeWhen the Price of Bad Policy is Hunger,” by Adam Lerick, The American Enterprise Institute, July 8, 2008; and Addressing the Global Food Crisis,” by Brett D. Schaefer, Ben Lieberman, and Brian M. Riedl, The Heritage Foundation, June 26, 2008.

Posted on 07/08/08 03:10 PM by Alex Adrianson

NGOs Complicit in Terrorism?

Colombia’s operation to rescue hostages held by FARC suggests that some NGOs are more than meets the eye. Mary Anastasia O’Grady writes:

In tricking FARC rebels into putting the hostages aboard a helicopter, undercover special forces simply told the comandantes that the aircraft was being loaned to them by a fictitious nongovernmental organization sympathetic to their cause called the International Humanitarian Mission.

It may have taken years for army intelligence to infiltrate the Revolutionary Armed Forces of Colombia, and it may have been tough to convincingly impersonate rebels. But what seems to have been a walk in the park was getting the FARC to believe that an NGO was providing resources to help it in the dirty work of ferrying captives to a new location.

I am reminded of President Álvaro Uribe’s 2003 statement that some “human rights” organizations in his country were fronts for terrorists. Connecticut Sen. Christopher Dodd got his back up over Mr. Uribe’s statement, and piously lectured the Colombian president about “the importance of democratic values.”

But as the helicopter story suggests, Mr. Uribe seems to have been right. How else to explain the fact that the FARC swallowed the line without batting an eye?

Posted on 07/07/08 05:39 PM by Alex Adrianson

India Won’t Stay Poor for the Planet

If global warming activists want to limit worldwide carbon emissions, they’ll just have to figure out how to do it without India. India’s National Action Plan on Climate Change, released on June 30, professes a commitment to plenty of things that should make environmentalists happy—renewable energy, sustainable development, energy efficiency—but in the end rejects any sort of national emissions cap.

Why no carbon limits? The Indian government doesn’t quite buy the argument that manmade global warming is a big problem. The action plan states: “No firm link between the documented [climate] changes described below and warming due to anthropogenic climate change has yet been established.” (Via Chris Horner at Planet Gore.)

More fundamentally, though, India wants economic growth and won’t accept any plan that gets in the way of India achieving a standard of living commensurate with the developed countries of the West. The Liberty Institute reports that, on unveiling the action plan, Prime Minister Manmohan Singh emphasized that “every citizen of this planet should have an equal share of the planetary atmospheric space and therefore, long-term convergence of per capita GHG emissions was the only equitable basis for a global agreement to tackle climate change.”

Meanwhile, the Syndey Morning Herald reports that Australia’s coalition government has taken a similar position on implementing a trading scheme for carbon emissions. Government spokesmen said it would make no sense for Australia to inflict economic harm on itself while other countries remain uncommitted to limiting emissions.

Posted on 07/07/08 05:21 PM by Alex Adrianson

Congress Tackles National Scourge of Bed Bugs

There might be an answer to the question: “Is there a problem Congress doesn’t think can be solved by a federal program?” Bed bugs, however, won’t be one of those answers if the bill H.R. 6068 becomes law. Also known as the “Don’t Let the Bed Bugs Bite Act,” the bill creates a three-year federal grant program for states that establish programs to inspect hotel rooms for bed bugs. The federal share of funding for such programs is limited to 80 percent. The bill was introduced by Rep. G. K. Butterfield (D-N.C.). Representatives William Jefferson (D-La.), Doris Matsui (D-Calif.), Donald Payne (D-N.J.), and Don Young (R-Alaska) are also sponsors.

Rep. Butterfield’s press release states: “… it’s not a joke.” Which, of course, is what makes it funny.

Hat tip: The WashingtonWatch.com Blog.

Posted on 07/07/08 03:41 PM by Alex Adrianson

Jesse Helms: Honor, Duty, Country, Family

Some thoughts on Senator Jesse Helms who died Friday, July 4, at the age of 86:

John Dodd, President of the Jesse Helms Center Foundation:

Jesse Helms understood both the value of teaching by example and learning through experience. He welcomed young people into what he called the Helms Senate Family and watched with pride when they graduated from their time in his office and took on new challenges in government or private life.

For 30 years “Helms University” nurtured the dreams and honed the skills of young people who recognized in Jesse Helms the virtues that they wanted to strengthen in their own lives. The lessons were not easy because there was never, ever, a compromise on honesty, accuracy, or respect for others. The hours were long because no matter what their titles, they shared the same job description — service to their country and to their constituency, all of the people of North Carolina. The pay was the lowest on Capitol Hill, but the benefit plan was the best because they worked with Sen. Helms. They were encouraged to excel; they were groomed for their own leadership roles. They were prepared to carry on the fight against policies and attitudes that would weaken America at home or abroad.

You may not yet know most of their names, but today they are already building careers in business, as elected officials, as advocates for public policy, as leaders on campuses and in churches, as advisers at the highest levels of government. Our nation is already benefiting from their decision to model their conduct after the man they proudly served as they demonstrate their own integrity and commitment to hard work in pursuit of high goals.

Ed Feulner, President of The Heritage Foundation:

Helms wasn’t afraid to stand alone for what was right, even if his opinion wasn’t always in line with that of his fellow elected officials. “I did not come to Washington to win a popularity contest,” he noted once while filibustering a bill. He did come to Washington to win policy disputes, and usually succeeded.

One way he did so was to slow down the legislative process when other lawmakers were racing to pass a bad measure. Time, after all, often showed Helms had been right all along.

For example, during the 1990s Helms led the fight to reduce the amount the U.S. paid to support the United Nations. Even though Washington provided an astounding 25 percent of the U.N.’s budget, bureaucrats at the world body wanted ever more, and diplomats around the globe accused the U.S. of being stingy.

Helms insisted that our share of the U.N. budget be reduced, and also demanded that it undertake vital reforms. Because of his hard work and willingness to stand alone, the U.S. reached a compromise and the U.N. was forced to (slightly) pare back its free-spending ways and deal with some of its shortcomings.

Danielle Pletka, Vice President for Foreign and Defense Policy Studies at the American Enterprise Institute:

Helms was a believer, and fundamentally, what he believed is the quintessence of America. The American constitution is the word of the land, trumping the fashionable vagaries of international law. Handouts create dependency, locally and internationally, but generosity to those in need is never amiss. Freedom is the heart’s blood of civilization. He loved Tibet, he loved Taiwan, he loved the Cuban people, and he loved real freedom fighters everywhere because he knew that he was one too.

Washington is full of people who say they love freedom. But what do they do? Jesse Helms faced down Soviet dictators, Arab thugs, Chinese communists, Latin American creeps and more, using every tool at his hands. He faced down the corruption of the United Nations, the fecklessness of the U.S. Agency for International Development, the anti-Americanism of the United States Information Agency, and the tyranny of all those who go along to get along. Often he did so in ways that frustrated the careerist bureaucracy that runs Washington.

Marc Rotterman, Senior Fellow at North Carolina’s John Locke Foundation

Most of the pundits had written off Ronald Reagan as presidential prospect after his efforts to unseat then President Gerald Ford resulted in a string of defeats in the 1976 Republican primaries. Senator Helms support for Reagan in NC in the 1976 primary produced 52-48 victory for Reagan’s troubled candidacy – propelling him on to the Republican convention in Kansas City where Reagan captured if not the votes the hearts and mind of the delegates with his performance and speech that year. Many would agree that 1976 set the stage for Reagan’s victory in the 1980.  The “Reagan Revolution” that followed pulled America out of’ Jimmy Carter’s malaise”, and back on the road to fiscal prosperity. And with Jesse Helm’s help Ronald Reagan hastened the end of communism worldwide. 

Marc Thiessen, currently chief White House speechwriter and formerly Foreign Relations Committee spokesman for Sen. Helms from 1995 to 2001:

In 1985, his dear friend Ronald Reagan was preparing for his first summit with Mikhail Gorbachev when a Ukrainian sailor named Miroslav Medvid twice jumped off a Soviet ship into the Mississippi River seeking political asylum. The Soviets insisted that Medvid had accidentally fallen off – twice. The State Department did not want an international incident on the eve of the summit. But Helms believed it was wrong to send a man back behind the Iron Curtain – no matter the cost to superpower diplomacy. He tried to block the ship’s departure by requiring the sailor to appear before the Senate Agriculture Committee, which he chaired then – and he had the subpoena delivered to the ship’s unwitting captain in a carton of North Carolina cigarettes.

Despite Helms’s efforts, the ship was allowed to leave for the Soviet Union with the Ukrainian sailor aboard. Miroslav Medvid was not heard from again until 15 years later, when he came to Washington to visit the man who fought so hard for his freedom. I was working at the time on Helms’s Foreign Relations Committee staff and witnessed this emotional meeting. Yes, Medvid told Helms, he had been trying to escape – that was why he joined the Merchant Marine in the first place. When he was returned to the Soviet Union, he said, he was incarcerated in a mental hospital for the criminally insane. The KGB tried to drug him, but a sympathetic nurse injected the drugs into his mattress. Eventually he was released; today he is a parish priest in his native village in Ukraine.

In 2002, The Heritage Foundation honored Sen. Helms with its Clare Boothe Luce Award, praising him as a “dedicated, unflinching and articulate advocate of conservative policy and principle.”

Posted on 07/07/08 02:49 PM by Alex Adrianson

Growing a Food Problem

Growing grain for fuel instead of food has been a larger factor in food price increases than previously thought, according to a new, unreleased report by the World Bank. The British newspaper The Guardian says it has obtained a copy of the World Bank document. According to The Guardian, the report estimates that 75 percent of food price increases have been caused by the growing use of grains to make biofuel. The U.S. government has estimated that plant-derived fuel contributes only 3 percent to rising food prices, while the International Monetary Fund pegged the impact at between 20 percent and 30 percent.

Currently, the United States mandates that 9 billion gallons of renewable fuels be mixed into the gasoline supply. In order to meet that requirement, one-quarter of the country’s corn production is used to make biofuels. The U.S. requirement will rise to 11 billion gallons in 2009 and will reach 36 billion gallons by 2036. The European Union will require that 10 percent of its transportation fuels be biofuels by 2020.

Earlier this year, the World Bank estimated that food prices have doubled in the past three years and that as result 100 million people throughout the world could be pushed into extreme poverty.

See alsoAddressing the Global Food Crisis,” by Brett D. Schaefer, Ben Lieberman, and Brian M. Riedl, The Heritage Foundation, June 26, 2008.

Posted on 07/07/08 01:31 PM by Alex Adrianson

The Coming Week – Monday, July 7, 2008

Some events that caught our eye:

Tuesday
• REVIEW the Supreme Court’s 2007-2008 term. Host: The Heritage Foundation.

Wednesday
FIND OUT if Americans are turning their back on free trade. The Hudson Institute hosts a panel discussion on the future of U.S. trade policy.

Thursday
ENJOY an intellectual feast of the great ideas, books, and thinkers on liberty, all of which will be at FreedomFest 2008.
HEAR a tale of how liberals created neo-conservatism. The American Enterprise Institute hosts author Ben Wattenberg.

For more events, see InsiderOnline’s Conservative Calendar.

Posted on 07/03/08 12:05 PM by Alex Adrianson

This Week at Heritage

Questions remain about North Korea’s “declaration” of its nuclear programs.

Posted on 07/03/08 11:51 AM by Alex Adrianson

What We Celebrate: Independence and Liberty

The arena of constitutional litigation seems never finished providing its prosaic lessons on liberty. And that fact is itself a lesson on liberty worth remembering this Independence Day.

Last week, the Supreme Court told us for the first time that the Second Amendment does indeed tell government there are certain things it may not do: Government may not completely ban the ownership of guns for self-defense, for instance. Not even for the purpose of protecting citizens from gun violence. Why not? Because, said Justice Antonin Scalia, “the enshrinement of constitutional rights necessarily takes certain policy choices off the table.”

The men who enshrined rights in the Constitution probably didn’t expect the right to keep and bear arms to be an open question 221 years later. But this development is no fault of theirs; they created, after all, a government of limited and enumerated powers. Somewhere along the way, the nation—and the Supreme Court—stopped taking constitutional limits on government power seriously. It seems obvious now that Heller v. District of Columbia, as the case came to be called, should have resulted in the overturning of D.C.’s gun ban, but it was not obvious when the case was launched. Some in the gun-rights camp questioned the wisdom of taking that case at that particular time, fearing that a loss would set the cause back decades. Indeed, if only one justice had voted against instead of for overturning, the gamble would have been lost.

But the Supreme Court got it right, helped by the brilliant arguments of attorneys Alan Gura, Bob Levy, and Clark Neily. As a result, the residents of the District of Columbia—and probably soon the residents of other municipalities, too—have an extra reason to celebrate this Independence Day: We’re not just free of foreign rule; we are now a little more free from the depredations of our own government. As soon as the decision is enforced, District residents will be able to enjoy the same right that on-duty police officers already possess: the right to defend themselves with a firearm. (How appropriate that the plaintiff himself—Dick Heller—is a security guard who merely wanted to have a gun at home just as he does at his job!)

Beyond gun rights, Heller affirms an idea that is central to any free society: Liberty is a value in its own right that cannot be trumped by the perception of a pressing social need. If that were the case, then liberty could never be secure from the purported good intentions of governments. There is no government on Earth that doesn’t think it is solving important problems when it exercises its power.

Today, this battle of individual rights versus the desires of governments continues in a different way in Philadelphia. There, the city council has decided to protect the public from incompetent and inaccurate historical tours by requiring tour guides to pass a test and get a license. Under this licensing scheme, unauthorized historical tours earn a fine of $300. Philadelphia, being the birthplace of the Constitution, has lots of history to tour. Talking about that history—what tour guides do—is surely protected by the Constitution’s First Amendment, which states: “Congress shall make no law … abridging the freedom of speech.” Tour guides think so, anyway, and are suing the city, with help from the Institute for Justice.

That Philadelphians must now get government permission before discussing the history of their city’s contribution to creating a free nation is truly a reminder that the fight for liberty never ends.

Happy Independence Day to all, but especially to those who have helped make this a free nation.

Posted on 07/03/08 11:22 AM by Alex Adrianson

Congress Should Get a Clue: Colombia Is an Ally, Not a Threat

While Congress sees trade with Colombia as a threat to the U.S. economy, Colombia continues to be an ally in the fight against terrorism. Colombia announced today that it has rescued 15 hostages from the terrorist group FARC. Among the freed hostages are former presidential candidate Ingrid Betancourt, and three American military contractors.

New York Times reports that the United States not only knew in advance about the operation, but assisted Colombia in the planning. So U.S. policy is what … that we’re happy to trust Colombia with military secrets, but won’t buy their shoes?

Posted on 07/02/08 06:13 PM by Alex Adrianson

Department of Labor: Retirement Plan Managers Cannot Use Funds for Activism

The union strategy of leveraging pension plan assets to achieve political goals took a hit from the Department of Labor last week. The Department sent a letter to the U.S. Chamber of Commerce stating its interpretation that federal law prohibits pension fund managers from using fund assets for purposes other than providing benefits for plan participants. In the past, unions have used their shares of company stock to offer shareholder resolutions on labor policies, global warming, political contributions, and other matters unrelated to workers’ retirement incomes. Unions have also used their pension holdings to pressure companies into making concessions on labor agreements, such as agreeing to allow “card check” elections.

In the letter, Louis J. Campagna, Chief of the Division of Fiduciary Interpretations in the Office of Regulations and Interpretations, said federal law prohibits pension fund managers from “subordinating the interests of participants and beneficiaries in their retirement income to unrelated objectives.” Campagna wrote:

The Department has also consistently rejected a construction of ERISA [Employee Retirement Income Security Act] that … would permit plan fiduciaries to expend trust assets to promote myriad public policy preferences. Rather, the Department has reiterated its view that plan fiduciaries may not increase expenses, sacrifice investment returns, or reduce the security of plan benefits in order to promote collateral goals. … the mere fact that plans are important participants in the national economy, and are generally affected by actions and events that affect the economy as a whole, does not convert policy proposals concerning the economy into a rationale for using plan assets on debates surrounding such proposals.

Campagna also stated that “fiduciaries may not, consistent with ERISA, increase expenses, sacrifice investment returns, or reduce the security of plan benefits in order to promote or oppose union organizing goals or collective bargaining agreements.”

This development is a good one. Pension plans belong to workers, not unions. At the Chamber of Commerce’s blog, David Chavern, the Chamber’s executive vice president commented: “With DOL having made its view of the law more than clear, union bosses ought to get back to managing their pensions for the benefit of workers, not for their own self-interest.”

Posted on 07/02/08 05:27 PM by Alex Adrianson

Fact of the Day: Truant Teachers

In a recent paper on teachers union contracts, Frederick Hess and Coby Loup note:

The U.S. Department of Education reports that in 1999–2000 (the most recent year for which data are available), 5.2 percent of teachers were absent on a given day—about triple the 1.7 percent absentee rate that the Bureau of Labor Statistics reports for all managerial and professional employment.

Posted on 07/02/08 02:52 PM by Alex Adrianson

Learn from the Onion

Politicians claim that speculators are to blame for high oil and gas prices, but speculation actually helps smooth price swings over time—at least if the history of the onion is any guide. Fortune magazine notes that in the late 1950s, onion producers blamed speculators for driving prices down and convinced Congress to ban speculation in onions. Contrary to the theory of the blame-the-speculators crowd,

… the volatility in onion prices makes the swings in oil and corn look tame, reinforcing academics’ belief that futures trading diminishes extreme price swings. Since 2006, oil prices have risen 100%, and corn is up 300%. But onion prices soared 400% between October 2006 and April 2007, when weather reduced crops, according to the U.S. Department of Agriculture, only to crash 96% by March 2008 on overproduction and then rebound 300% by this past April.

Hat tip: Dan Griswold at Cato-at-Liberty.

Posted on 07/02/08 02:49 PM by Alex Adrianson

Teachers’ Contracts: The Best and the Worst

Teachers union contracts can be an impediment to the effective management of public schools, but not all public schools are equally hamstrung. Frederick M. Hess and Coby Loup of the American Enterprise Institute examined teachers’ contracts in the 50 largest school districts in the country and found that school administrators are afforded varying degrees of flexibility across the districts.

Teachers’ contracts can make it difficult, or prevent, school administrators from instituting pay-for-performance systems, from giving teaching assignments to the teachers most suited for them, from setting policies on the use of professional development funds, from setting guidelines on the use of leave, and from exercising discretion in numerous other ways.  

According to Hess and Loup, the five districts with the best contracts—those that give administrators the most flexibility—are Guilford County Schools in Greensboro, N.C.; Austin Independent School District in Texas; Northside Independent School District in San Antonio, Texas; Dallas Independent School District in Texas; and Fairfax County Public Schools in the Virginia suburbs of Washington, D.C.

The five districts with the worst contracts—those that give administrators the least flexibility—are Memphis City Schools in Tennessee; Prince George’s County Public Schools in the Maryland suburbs of Washington, D.C.; San Diego Unified School District in California; Cleveland Municipal City School District in Ohio; and Fresno Unified School District in California.

The reason public schools can indulge the demands of organized pressure groups like teachers unions is that public schools are essentially monopolistic organizations. They face no competition in the market for education. If schools did face competition, then they would have to balance the need to retain quality teachers with the need to satisfy their customers—the students. This fact goes a long way toward explaining why teachers unions are opposed to school choice reforms.

By the way, the National Education Association is meeting this week in Washington, D.C., and it has just released a proposal to redefine the federal-state-local partnership in education. The proposal is marketed as a brave new vision, but it contains nothing that would create competition in primary education. The NEA remains committed to defending the near monopoly of public schools over primary education.

Posted on 07/02/08 02:20 PM by Alex Adrianson

Does Data Matter?

There’s been a lot of evidence contrary to global warming popping up these days, primarily the fact that Earth has actually been in a cooling period for the past five years. Further, in May, German climate modelers predicted that there won’t be any more global warming until about 2020. Should we expect such revelations to change the debate over global warming?

Not likely, because, as the Wall Street Journal’s Bret Stephens points out, the global non-warming deniers have a strong psychological need to believe that global warming is happening.

Listen carefully to the global warming alarmists, and the main theme that emerges is that what the developed world needs is a large dose of penance. What’s remarkable is the extent to which penance sells among a mostly secular audience. What is there to be penitent about?

As it turns out, a lot, at least if you’re inclined to believe that our successes are undeserved and that prosperity is morally suspect. In this view, global warming is nature’s great comeuppance, affirming as nothing else our guilty conscience for our worldly success.

In “The Varieties of Religious Experience,” William James distinguishes between healthy, life-affirming religion and the monastically inclined, “morbid-minded” religion of the sick-souled. Global warming is sick-souled religion.

Posted on 07/01/08 05:12 PM by Alex Adrianson

Don’t Be Afraid to Socialize with Your Donors

Kevin Gentry of the Koch Foundation has a great and timely idea for building relationships with donors. It’s an idea you could implement this week, if you are up to it. Read on, from Kevin’s weekly e-mail:

Are there occasions where you could cultivate your relationships with supporters by including them in informal social gatherings?

This is a tough one, but for some inexplicable reason many of us begin our relationships with our financial supporters as if these investors in our work are a separate species of humans. Sometimes we see our relationships as transactional, or even at times almost confrontational: we’ll hit them up for support, or twist their arms. “We could really use $25,000, can you help? That’s great. Thank you. Good bye! (Talk to you again next year...)”

But if our investors are true partners with us in advancing our mission, can’t we also treat them as friends?

Think about that, if you would.

Last week at our Development Exchange, Bob Williams shared how his organization, the Evergreen Freedom Foundation in Olympia, Washington, has utilized full-day seminars for supporters to effectively market planned giving. Key to Evergreen’s success has been the creation of an informal and interactive setting for those meetings, held across the state in Spokane, Seattle and Vancouver.

Just imagine. If there was still time this week, could you invite a few local supporters over to your home this Friday for burgers on the grill with your family? Celebrating this special holiday would very likely coincide nicely with your organization’s mission.

This might not be the right fit for every supporter (and it might not be right for you). But consider if there are a few older empty nesters, perhaps even a widow or widower, who might be greatly touched by your kind gesture. And it might be a lot of fun, too.

Posted on 07/01/08 04:51 PM by Alex Adrianson

What’s Next for Gun Rights?

Alan Gura, the lawyer who, along with Bob Levy and Clark Neily, won the case that struck down the District of Columbia’s ban on guns, provides his take on Justice Antonin Scalia’s decision in Heller v. District of Columbia:

The case is “narrow but broad.” Narrow, in the sense that our objective was merely to secure the individual nature of Second Amendment rights, and demonstrate—with a judgment—that the right has substance. Broad, in the sense that this simple principle can now be applied in other contexts. This is not just about flat-out gun bans in Washington, D.C. homes. All regulations that touch upon Second Amendment rights will get a well-deserved constitutional look. Instant background checks and felon-in-possession laws will survive. Laws meant to harass gun possession, while at best advancing only a hypothetical public benefit, will not. The Second Amendment is now a normal part of the Bill of Rights. It’s not realistic to expect one Second Amendment case to answer all right to arms questions for all time, just as we have no one decision telling us what a Fourth Amendment “reasonable search” in all circumstances. We may not win every case. We’ll win a good amount of them. The next step is obviously 14th Amendment incorporation. I’m looking forward to leading that fight.

Next up for Gura is a challenge to Chicago’s restrictions on handguns. The problem with Chicago’s handgun law, says Gura, is that it requires each gun to be registered annually:

Each time … a tax is imposed, forms must be filled out, photographs submitted. A person who owns more than one gun will find herself or himself constantly in the process of registering each gun as it comes due for expiration. If registration is to be required, once is enough.

Under Chicago’s laws, if a gun owner fails to re-register a gun on time, he is disallowed from registering that gun ever again. You can learn more at www.chicagoguncase.com.

Posted on 07/01/08 02:32 PM by Alex Adrianson

Oil Prices Are Not a Mystery

Is tighter regulation of speculators, as the Democrats are proposing, the answer to high oil prices? Or do we need more supply?

In an article primarily about ethanol inflation (Yes, ethanol prices can be volatile, too—up 19 percent because of Midwest floods!), the New York Times sums up the oil supply situation:

In the 1980s, the oil capacity cushion peaked at around 20 percent of global consumption. Today, it represents only about 2 percent — less than Iran’s petroleum exports.

Posted on 07/01/08 12:46 PM by Alex Adrianson

Don’t Mess with Milton!

Author Naomi Klein is one of the biggest anti-capitalist voices going these days. But, as demonstrated in the Reason TV video below, she gets quite a few things wrong. Who better to point out her errors than Milton Friedman?

Posted on 07/01/08 11:32 AM by Alex Adrianson

Revelation: Europeans Don’t Want Unelected Bureaucrats Running Their Lives

French President Nicholas Sarkozy, quoted by the BBC on forthcoming French presidency of the European Union:

Europe worries people and, worse than that, I find, little by little our fellow citizens are asking themselves if after all the national level isn’t better equipped to protect them than the European level.

Posted on 07/01/08 10:53 AM by Alex Adrianson

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