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InsiderOnline Blog: August 2009

Health Care: Witness for the Prosecution

Not content to let the Post Office or DMV analogies make their argument, supporters of government-run health care have now identified fire departments and water departments as examples of how government can run some things better than the private sector. There’s a new video going around making just such an argument for government-run health care, but Lee Doren of Bureaucrash has done an excellent debunking-by-annotation job on that video:

Posted on 08/31/09 03:08 PM by Alex Adrianson

The Government Can

Here’s a little bit of fun from singer/comedian Tim Hawkins:

Posted on 08/31/09 11:54 AM by Alex Adrianson

The High Price of Too Much Optimism

This week the federal government’s projected 10-year budget deficit increased by approximately $2 trillion, to a total of $9 trillion for the period 2009-2019. No Congress didn’t create a new program; it’s just that the Office of Management and Budget finally decided to use more realistic estimates of economic growth for its mid-session review of the budget situation.

In total, new borrowing over the period will come to $80,000 per household, and public debt will now reach 77 percent of gross domestic product by 2019—a peacetime record. Heritage fellow Brian Riedl notes that under current projections “America would accumulate more government debt under President Obama than under every President in American history from George Washington to George W. Bush combined.”

But the administration may still be too optimistic in its projections. Says Riedl:

The White House underestimates future budget deficits by trillions of dollars by (1) assuming that discretionary spending will be frozen to inflation for the next decade, (2) assuming that cap-and-trade revenues will be available to finance a Make Work Pay credit (the House-passed bill allocates those revenues elsewhere), (3) assuming health care reform will be deficit-neutral, and (4) assuming certain tax increases that are unlikely to be enacted.

The White House also likely overestimates long-term economic growth. Its forecast for real GDP growth in 2010 and 2011 is reasonable but exceedingly optimistic after the economic recovery. The Administration forecast exceeds that of the CBO every year by as much as 0.9 percentage points as late as 2015 and by a cumulative 3.9 percentage points over the 2012-2019 period. In effect, the Administration is assuming a full year’s additional growth over those eight years. The effect is to boost revenues significantly in each year and by as much as $160 billion in the 10th year and a cumulative amount of almost $680 billion.

Diana Furchtgott-Roth agrees, noting that the White House’s projections for economic growth are “far higher than historical norms—the economy has not seen such a period of growth since the 1960s.” And:

Excessive Obama optimism is not limited to economic growth. Despite the enormous monetary stimulus pumped out by the Federal Reserve in 2008-2009, bank credit that is widely regarded as potentially inflationary, the administration assumes that inflation will actually decline from 2.1% in 2008 to 1.5% in 2009 and then to 1.3% in 2010 and 2011, and not rise above 1.8% through 2019.

Assuming lower inflation means predicting lower interest payments on all those extra trillions of dollars of government debt. But few Americans would invest their own hard-earned money believing forecasts of such low inflation.

The federal government is already spending money it doesn’t have, but by assuming rosier economic scenarios than are justified, the administration can pretend that tough budget decisions are not necessary.

Posted on 08/28/09 09:18 AM by Alex Adrianson

Cash for Clunkers: Not an Environmental Program

The cost eliminating a ton of carbon dioxide emissions via the “Cash for Clunkers” program works out to $652, which is about 33 times the price ($20) of buying a permit to emit a ton of carbon dioxide in Europe, according to calculations by Todd Myers and H. Sterling Burnett.

Obviously, reducing emissions was never the real point of “Cash for Clunkers.” It was really more akin to New Deal agricultural policy, which paid farmers to destroy crops in order to raise the prices of those commodities. As noted in a previous post this week, “Cash for Clunkers” succeeded in destroying about $1 billion worth of usable assets (at a cost to the taxpayer of $3 billion). Consumers can expect higher automobile prices as a result.

Posted on 08/27/09 06:02 PM by Alex Adrianson

We’re Not Making This Up: London Police Steal to Teach Lesson on Locking Cars

“To teach motorists who leave their cars unlocked a lesson,” reports Jacob Sullum at Hit and Run, “police in Richmond upon Thames, a borough of London, have begun taking their stuff.”

 The victims beneficiaries of these thefts educational efforts return to their cars and find that expensive items such as cameras, laptops, and leather jackets have been replaced by notes instructing them to retrieve their valuables at the police station. Not to worry, though: “If items are needed urgently,” the London Times reports, “police will return the goods immediately.” Which suggests that if you can’t show an urgent need for, say, your computer, they’ll take their own sweet time. The justification offered by Superintendent Jim Davis: “People would be far more upset if their property really was stolen.”

If motorists catch police breaking into their cars, do they get to teach the police a lesson about the hazards of invading private property?

Posted on 08/27/09 05:05 PM by Alex Adrianson

Pick the Right College

The Intercollegiate Studies Institute has just published a new edition of Choosing the Right College and the companion Web site, CollegeGuide.org. These are both great resources for students and parents thinking about college. While U.S. News and World Report ranks colleges according to prestige and popularity, Choosing the Right College looks at factors that really matter—things like the rigor of a school’s curriculum, whether a school rewards teachers for teaching or for doing research, and whether a school’s campus is a place of open debate and free expression or a hive of politically correct intimidation.

Posted on 08/27/09 03:05 PM by Alex Adrianson

Home-Schooled Students Excelling Academically

In the United States, there are now approximately 1.7 million students who are being taught at home by their parents; and these students are doing just fine without public education, according to a new study by the National Home Education Research Institute. The study, which was commissioned by the Home School Legal Defense Association, finds that home-schooled children score between 34 and 39 percentile points higher than their public school peers on standardized tests. The averages for home-schooled children ranged from the 84th percentile for language, math, and social studies to the 89th percentile for reading. The 50th percentile is statistically average.

The study has some other interesting findings, too. For instance, the study finds that the level of state regulation on the practice of home-schooling makes no difference for student performance; students home-schooled in states with low levels of regulation on home-schooling perform just as well on standardized tests as do home-school students in states with high levels of regulation. Similarly, whether parents have teacher certification is also unrelated to student performance. The study finds that the education levels of parents and family income have almost no effect on performance. Home-schooled students whose parents have no college degrees perform at the 83rd percentile, while home-schooled students from families with annual household income below $35,000 perform at the 85th percentile. How much difference does spending on school supplies make? Almost none for home-schooled students:

See “Progress Report 2009: Homeschooling Academic Achievement and Demographics,” by Brian Ray, published by the National Home School Legal Defense Association, August 2009.

Posted on 08/27/09 12:06 PM by Alex Adrianson

Strategy Workshop for Tea Partiers

Tea party goers coming to the nation’s capital for the 9/12 March on Washington should check out a Tea Party Strategy Workshop that’s being held on September 11. The event, put on by the Ayn Rand Institute and the Competitive Enterprise Institute, aims to offer intellectual ammunition for Tea Party activists who want to become effective advocates for liberty. The session will cover such topics as the Founding ideals of America, and how to make moral arguments for free markets.

Posted on 08/26/09 04:11 PM by Alex Adrianson

Rep. Tom Price: Need a Solution that Respects Free Individuals

What Rep. Tom Price (R-Ga.) thinks of health care reform so far:

Posted on 08/26/09 03:51 PM by Alex Adrianson

Feedback Sought with Africa Governance Quiz

Those of our readers who follow Africa issues may be interested in providing some feedback for the Inter Region Economic Network (IREN), the free market think tank in Kenya that has been one of the main organizers of the Africa Resource Bank.

As part of its preparations for this year’s Africa Resource Bank—November 11-14 in Arusha, Tanzania—IREN is asking interested parties to participate in its Africa Governance Quiz.

Posted on 08/26/09 02:23 PM by Alex Adrianson

Shattered Lives

Anybody who says that “free market health care”—despite having no relevant experience with any such animal—is an awful, heartless system should always be confronted with the question: “As compared to what?”

The laws of economics don’t go away when government takes over health care. It’s just a different group of people who now have to figure out how to deal with the reality that we live in a world of limited resources. “Shattered Lives: 100 Victims of Government Health Care” by Amy Ridenour and Ryan Balis reveals how health care rationing by government bureaucrats impacts real people. The episodes covered in this report, published by the National Center for Public Policy Research, are ones that promoters of government-run health care would probably rather not hear—but should.

Readers will learn about Richard Adams, an 85-year-old retired engineer and award-winning dancer, who went blind in both eyes waiting three years for cataract surgery, which would have taken 20 minutes to perform. Only after Adam’s case received attention in the press did the British National Health Service relent and schedule cataract surgery—for one eye. Unfortunately, Adams never got to enjoy being able to perform everyday tasks again. He died four days after the surgery of a heart attack after developing blood poisoning in the hospital.

Readers will also learn about David Malleau of Ontario, Canada, who literally had a hole in his head: Malleau had been in a car accident, and doctors needed to remove a fist-sized portion of Malleau’s skull to allow his brain to swell. But the hospital wouldn’t schedule the follow-up surgery to replace the missing piece of Malleau’s skull. Here too, an embarrassing publicity campaign was needed to get the hospital to schedule the needed surgery. By then, Malleau had spent over a year of his life sitting at home doing almost nothing for fear that the smallest bump on the head would prove fatal.

There’s lots more stories of this sort in the report—as the title says, 100 in all. The stories were obviously chosen to make the point that government-run health care systems can treat patients shabbily and callously, not to paint a representative picture of how patients are treated by these systems. But the worst stories are worth hearing precisely because in a universal health care system there is only one provider or only one insurer, and patients who receive maltreatment have no alternatives to which they can turn—except shaming the bureaucrats with a publicity campaign, or leaving the country for treatment elsewhere.

Posted on 08/26/09 12:41 PM by Alex Adrianson

How About a Tax Permanent Vacation?

Sales tax holidays are coming up in a number of states. The Tax Foundation identifies seven reasons why tax holidays are bad policy:

• They do not promote economic growth. The increase in purchases during the holiday largely represents a shift in the timing of purchases, not an increase in overall purchases.

• Prices may not decrease as much as expected. Retailers may increase prices before and during a sales tax holiday to take advantage of the frenzy of activity, thereby absorbing some of the tax benefit meant to go to consumers.

• Complexity and compliance costs: Businesses must spend time and money complying with a new set of tax laws for a temporary period, sometimes as short as one day.

• Sales tax holidays arbitrarily discriminate between products. Sales tax holidays usually only apply to a specific list of products, such as school supplies, sports equipment, clothing, or computers.

• Sales tax holidays arbitrarily discriminate across time. Some consumers may not be able to shop during a certain time period for various reasons (e.g. they are out of town or between paychecks).

• Sales tax holidays are not an effective or efficient means of tax relief for the poor. Because they apply only to certain products and for short periods of time, low-income consumers can only see a small benefit. And to achieve this small amount of tax relief for low-income consumers, lawmakers give a large amount to middle- and high-income consumers.

• Sales tax holidays are a bad form of tax relief in general. Because of time and product discrimination, only certain consumers benefit. If the sales tax is too burdensome for consumers then lawmakers should reduce the sales tax rate year-round for all products, thereby ensuring that all consumers can benefit. This approach also has real long-term economic benefits and makes the state more competitive nationally.

Posted on 08/25/09 05:46 PM by Alex Adrianson

Are You Paying $30,000 for Bob Dylan 101?

“Science of Stuff,” “Floral Art,” and “Introduction to Popular TV and Movies” are some of the classes that satisfy general education requirements at major colleges and universities these days, according to a new report by the American Council of Trustees and Alumni (ACTA). In “What Will They Learn?” ACTA examined the core curricula at 100 U.S. colleges and universities and found that most of these schools are failing to provide their students with a well-rounded general education.

According to ACTA, a university’s general education requirements should cover seven core subject areas: composition, literature, foreign language, U.S. government or history, economics, mathematics, and natural or physical science. ACTA graded each school’s general education curricula, giving only five schools an A (at least six of the seven core areas required), and only 33 schools a B (four or five core areas required). Twenty schools got a C (three core areas required), 17 schools received a D (two core areas required), and 25 schools received an F.

At many schools, says ACTA, students may find courses that cover the core subjects, but they may also avoid those courses entirely. Liberal arts schools in particular have watered down their general education requirements by adding many eclectic course options, says the report:

Places like Williams College and Amherst College proclaim their dedication to the principles and goals of liberal education, but in fact have virtually no requirements. Wesleyan University promises that its general education curriculum will allow freshmen and sophomores to experience the “full dimension of intellectual breadth vital to a liberal education.” However, students can bypass hard science courses in favor of classes such as “The Psychology of Reading” or “Physics for Future Presidents.” And they can avoid broad surveys of history and literature altogether with such courses as “Everyday Forms of Resistance” and “Oral Histories and the Portland Brownstone Quarry.” Indeed, 70 percent of the so-called Liberal Arts Colleges have two or fewer of the course requirements we analyzed. Rather than offering a true liberal education designed to liberate the mind, these schools are in effect leaving it up to students to figure out what they will need—and families are paying dearly for the privilege of a do-it-yourself curriculum.

The five schools receiving an A in the ACTA ranking are the University of Arkansas, the City University of New York-Brooklyn College, the University of Texas-Austin, Texas A&M University, and the United States Military Academy. The report has a companion Web site, WhatWillTheyLearn.com, that lets parents and students compare schools’ curricula, costs, and graduation rates.

Posted on 08/25/09 03:09 PM by Alex Adrianson

Have We Over-Invested in Higher Education?

Richard Vedder:

Twelve percent of the mail carriers in the United States today now have bachelor’s degrees. Do you really need a bachelor’s degree to deliver the mail? In 1970, only 3 percent did. Is it suddenly mail delivery has become much more intellectually challenging than it did 40 years ago? I don’t think so. We’re having more and more people who are getting college degrees that are having trouble getting jobs that are really related to the intellectual development (such as it is) that they get while they are in universities. So I am wondering whether we have maybe started to over-invest in higher education. … Many people going to college don’t have the cognitive skills for college. They are ill-prepared for college, and if they do get a degree, it’s often watered down. And we’re just spending a lot of money to give a person a piece of paper.

Posted on 08/25/09 01:43 PM by Alex Adrianson

A Gain of .023 Percent!

So what did taxpayers get in return for their $3 billion spent on the “Cash for Clunkers” program? The Washington Examiner reports that Edmunds.com has compiled sales data for the first tranche of the program directly from dealers. According to Edmunds, the average value of clunkers traded in was $1,475, which works out to a value $1.1 billion for the entire fleet of vehicles traded in and destroyed—$1.1 billion worth of usable assets destroyed. The environmental benefit? Edmunds data, the Examiner reports, show that

CARS participants upgraded their fuel efficiency by 51 percent – from an average 16.1 mpg for traded clunkers to an average of 24.3 mpg for their new cars. The final numbers are not in as we write, but CARS is expected to subsidize perhaps 750,000 new purchases, and destroy the same number of clunkers. This means that overall [Cash for Clunkers] improved the fuel efficiency of America’s collective 251-million-car fleet of vehicles by – at most – 0.023 percent. In other words, if Americans were getting an average of 20 miles to the gallon before CARS, they are getting 20.0046 mpg after it.

Posted on 08/25/09 11:37 AM by Alex Adrianson

The Power to Make People Buy Stuff Is Not in the Constitution

Mandating that individuals purchase health insurance, as President Obama’s health care plan has proposed, is not a power that the Constitution has given to Congress, say David Rivken and Lee Casey:

Although the Supreme Court has interpreted Congress’s commerce power expansively, this type of mandate would not pass muster even under the most aggressive commerce clause cases. In Wickard v. Filburn (1942), the court upheld a federal law regulating the national wheat markets. The law was drawn so broadly that wheat grown for consumption on individual farms also was regulated. Even though this rule reached purely local (rather than interstate) activity, the court reasoned that the consumption of homegrown wheat by individual farms would, in the aggregate, have a substantial economic effect on interstate commerce, and so was within Congress’s reach.

The court reaffirmed this rationale in 2005 in Gonzales v. Raich, when it validated Congress’s authority to regulate the home cultivation of marijuana for personal use. In doing so, however, the justices emphasized that – as in the wheat case – “the activities regulated by the [Controlled Substances Act] are quintessentially economic.” That simply would not be true with regard to an individual health insurance mandate.

The otherwise uninsured would be required to buy coverage, not because they were even tangentially engaged in the “production, distribution or consumption of commodities,” but for no other reason than that people without health insurance exist. The federal government does not have the power to regulate Americans simply because they are there.

Posted on 08/24/09 06:29 PM by Alex Adrianson

Health and Health Care Are Two Different Things

Don’t blame the U.S. health care system for high rates of infant mortality. Promoters of single-payer health care systems often point to high U.S. infant mortality as evidence that the United States should have a health care system where the government pays all the bills, as in Canada. The United States is 29th in the world in infant survival rates. But differences in health care systems don’t account for all differences in health. In his latest Chicago Tribune column, Steve Chapman points out that Americans make a number of lifestyle choices that lead to a greater proportion of babies being born with a low birth weight—a significant risk factor for infant death. People in the United States, for instance, have 10 times the obesity rate of the Japanese; and a baby born in the United States is seven times more likely to have a teenage mother than is a baby born in Sweden. Substance abuse and smoking are also linked to the problem of low-birth weight babies, according to a National Bureau of Economic Research paper by June O’Neil and Dave O’Neil.

The NBER authors also calculated mortality rates for low-birth weight babies. They found that the United States actually has a lower infant mortality rate for low-birth weight babies than does Canada, which suggests that if the United States adopted Canada’s health care system, its infant mortality problem would get worse.

Hat tip: Club for Growth.

Posted on 08/24/09 02:25 PM by Alex Adrianson

Not Evil, Just Wrong

At the RightOnline conference over the weekend, we caught up with Phelim McAleer to talk about Not Evil, Just Wrong, the new the documentary on global warming alarmism that he and his wife Ann McElhinney have produced.

Posted on 08/21/09 01:00 AM by Alex Adrianson

More Government Is the Wrong Health Care Reform

Everyone was talking about health care reform at the RightOnline conference over the weekend. So we did some listening. Tim Phillips, president of Americans for Prosperity, explains why more government isn’t the answer; and Nick Pandelidis, M.D., explains why reforms that try cut down on the use of specialists is a bad idea (That sounds right; didn’t Adam Smith tell us a few centuries ago that growth in specialization leads to greater prosperity?).

Posted on 08/20/09 11:15 PM by Alex Adrianson

“My Secret Is That, for Me, It’s Not Hard Work”

Was Bob Novak really a curmudgeon? No, he just played one on TV, says Neal Freeman, whose fine tribute to Novak begins this way:  

The news of Bob Novak’s death recalled a line of Roy Blount’s about a deceased friend: “I was shocked to learn of his death. It was so unlike him.” So it was with Bob Novak. He was so relentless in pursuit of his boyhood dreams, so delighted to be the Joliet kid all grown up and still chasing big-deal Beltway stories, so alive. After working alongside him for a few years, I told him that I had finally discovered the secret of his success. “Novak, you’re not all that smart. You just work harder than everybody else.” He replied, “My secret is that, for me, it’s not hard work.” It is a great pleasure, unfortunately a rare pleasure, to run across somebody who knows exactly what he should be doing with his life. That was Bob Novak, boy reporter, dead this week at 78.

The entire article, at American Spectator, will surely delight Novak fans.

Posted on 08/20/09 10:28 PM by Alex Adrianson

Health Care Rationing in Oregon

Every health care system—socialist or capitalist or in-between—must ration resources. What happens when government decides instead of markets?

Posted on 08/20/09 09:35 PM by Alex Adrianson

More Regulation of Political Speech Coming?

The idea that there must be some nefarious corporate conjurer behind the town hall displays of opposition to Democrats’ health care reform plans has given strength to another unfortunate agenda, reports Jacob Sullum in his latest Reason column: We need disclosure laws for grassroots lobbying, goes the argument, so that we’ll know who is responsible for the “Astroturf,” as the critics call it.

But the disclosure laws the critics want can chill constitutionally protected speech, while doing exactly the opposite of leveling the playing field for the little guy. When a bill regulating grassroots lobbying was proposed two years ago, writes Sullum,

The ACLU warned that the measure “imposes onerous reporting requirements that will chill constitutionally protected activity.” It said a wide range of advocacy organizations, including “small, state grassroots organizations with no lobbying presence in Washington,” “would now find their communications to the general public about policy matters redefined as lobbying.” Since “failure to register and report could have severe civil and potentially criminal sanctions,” the ACLU said, some groups “may well decide that silence is the best option.” 

Political professionals with deep pockets, on the other hand, would be better able to handle the paper work burden and the legal risks.

In some states, regulations on political activity may already be chilling speech. In a 2007 Institute for Justice study, not a single one of 255 college-educated people were able to fill out correctly the disclosure forms that groups supporting or opposing ballot initiatives must submit in California, Colorado, and Missouri. Even more troubling, the vast majority of the subjects didn’t even realize they needed to register before forming such groups. Why would they know? The right to engage in political speech is supposed to be protected by the Constitution.

Posted on 08/20/09 04:31 PM by Alex Adrianson

This Day 20 Years Ago: The Iron Curtain Lifts

It was 20 years ago today that the Iron Curtain began to unravel. On August 19, 1989, the Austrian-Hungarian border near the Hungarian city of Sopron was opened in what was supposed to be a three-hour long affair allowing for the orderly exchange of greetings between local populations on either side of the frontier. But the exercise in glasnost turned into a mass exodus. Hundreds of East Germans showed up after having been tipped off by Hungarian organizers. On September 11, 1989, the Hungarian border was opened for good; a mere two months later, the Berlin Wall fell; and 11 months after that, the German Democratic Republic ceased to exist.

Could it all have turned out differently? Radio Free Europe/Radio Liberty reports:

The commander of the Hungarian border guards on that day, Arpad Bella, says he saw a mass of people walking toward him from the Hungarian side, including women and children, and old people. Their intention was obviously to cross the border.

Given that the guards were still under orders to shoot anyone trying to cross the frontier illegally, Bella said he had “a few seconds” to decide what to do – to shoot or not to shoot. He obeyed the dictates of his conscience and let them pass. …

“What I saw on the other side was amazing,” Bella recalls. “There were people who in their panic kept running further even though they were on Austrian land. There were people who just sat down on the other side of the border and just either cried or laughed. So there was an incredible range of emotions bursting out.”

A statue marking the day’s events was unveiled today on the Hungarian side.

Posted on 08/19/09 07:24 PM by Alex Adrianson

Rose Friedman, R.I.P.

Rose Friedman, who died yesterday of heart failure, was much more than spouse of a Nobel Prize-winning economist. Rose Friedman was Milton Friedman’s intellectual partner in seven decades-worth of promoting the ideas and the policies of a free society. With Milton, she authored three books, Free to Choose, Tyranny of the Status Quo, and their memoirs Two Lucky People. She also produced the TV series “Free to Choose” (based on the book), and is credited with assisting Milton in writing his seminal Capitalism and Freedom, published in 1962. In Two Lucky People, Milton said that Rose had been a crucial partner in nearly all his economic and public policy work. President George W. Bush once said Rose Friedman was the only person ever to have won an argument with Milton Friedman. The Friedman’s together founded the Friedman Foundation for Educational Choice, which is located in Indianapolis, Indiana. The Friedman Foundation is one of the leading organizations in the school choice movement. Today, more than 150,000 students benefit from school choice voucher/tax credit programs. Millions more benefit from charter schools and public school choice programs.

A lot of tributes and remembrances to Rose Friedman have been penned in the past day. At The Corner, John Miller notes a precious passage from an interview with Rose and Milton a few years ago in the Wall Street Journal:

Mr. Friedman here shifted focus. “What’s really killed the Republican Party isn’t spending, it’s Iraq. As it happens, I was opposed to going into Iraq from the beginning. I think it was a mistake, for the simple reason that I do not believe the United States of America ought to be involved in aggression.” Mrs. Friedman—listening to her husband with an ear cocked—was now muttering darkly.

Milton: “Huh? What?” Rose: “This was not aggression!” Milton (exasperatedly): “It was aggression. Of course it was!” Rose: “You count it as aggression if it’s against the people, not against the monster who’s ruling them. We don’t agree. This is the first thing to come along in our lives, of the deep things, that we don’t agree on. We have disagreed on little things, obviously—such as, I don’t want to go out to dinner, he wants to go out—but big issues, this is the first one!” Milton: “But, having said that, once we went in to Iraq, it seems to me very important that we make a success of it.” Rose: “And we will!”

Mrs. Friedman, you will note, had the last word.

Posted on 08/19/09 04:35 PM by Alex Adrianson

Obamacare: More Mandates, More Taxes, More Government Spending, Less Innovation

What will happen to health care in the United States if Congress passes Obamacare? The Heritage Foundation’s Nina Owcharenko provides an overview in a townhall teleconference from last night.

Posted on 08/19/09 02:42 PM by Alex Adrianson

9/12

What’s next for the Tea Party movement? On September 12, thousands of citizens will march on the nation’s capital to say “enough” to out-of-control big government spending. For more information on the event, visit 912dc.org.

Posted on 08/18/09 06:47 PM by Alex Adrianson

More Sunshine

Sunshine.gop.gov is a new Web site offering a smattering of information on who’s getting what courtesy of federal taxpayers. The site, produced by House Republican Conference, offers two different searchable databases: one for earmark requests made by members of the House, and another for projects funded by the stimulus bill. In addition, users can access a state-by-state list of the financial institutions that have received money under the Troubled Asset Relief Program and a list of each Congressman’s transportation and infrastructure authorization requests.

Posted on 08/18/09 02:38 PM by Alex Adrianson

Government v. the Economy 101

A quick primer on the different ways that government spending can hurt the economy, from Dan Mitchell of the Center for Freedom and Prosperity:

Posted on 08/17/09 01:45 PM by Alex Adrianson

Tips for Online Marketing and Fundraising

From the RightOnline conference over the weekend, here are a few quick points for organizations to keep in mind about how the Internet affects their fundraising and marketing:

Adrienne Royer, Leadership Institute:

1. Online fundraising, just like traditional fundraising, is about relationships.

2. Online techniques are a supplement to, not a replacement for, traditional fundraising. The two realms of fundraising need to be integrated: When communicating with donors offline, tell them about online giving options. When communicating with donors online, tell them about offline giving options.

3. Best practices in online fundraising are largely the same as those in traditional fundraising. For instance, you still need to follow-up gifts with a “thank you” letter. And transparency should be an important part of your online effort; make sure your IRS 990 is accessible online.

4. But, one way that online fundraising is different than traditional fundraising is that social media (Twitter, Facebook) makes it easier to target “the influentials”—people who will take your message and communicate it to others in their circle of influence.

5. Also, social media compresses the development cycle because it creates more instantaneous feedback from donors. Organizations should take advantage of the opportunity to have mass two-way conversations with their donors.

Todd Thurman, The Heritage Foundation:

1. Twitter and Facebook allow organizations to engage people they might not otherwise reach.

2. Interaction is key on Twitter: Reply to comments. Use hash tags.

3. All non-profits should take advantage of Google Grants, which provides $10,000 worth of advertising on Google searches.

4. Paid ads on Google can also drive traffic on hot topics.

5. We don’t know what the next big thing in social media will be, but mastering today’s platforms will help you transition to whatever comes next.

Posted on 08/17/09 11:46 AM by Alex Adrianson

How the Internet Affects Every Aspect of Your Organization

At RightOnline, some helpful points for policy/political organizations to keep in mind from Soren Dayton of New Media Strategies:

1. Technology isn’t a magic button that you just push and expect good outcomes.

2. The most important thing to have on your Web site homepage is a sign-up option.

3. Sign-up forms should always ask people what issues they are interested in.

4. Facebook ads are really cheap and are the best way for non-profits to target audiences that care about their issues. For many organizations, Facebook ads are the most cost-effective thing they can be doing.

5. But, e-mail is still the killer app of the Internet—still more important than Facebook and Twitter.

6. E-mails from your organization should have a voice, should have a casual tone, and should be regular (but probably not more than once per week).

7. It is a mistake to think that you need different people doing press relations and blogger relations. Those functions should be integrated.

8. If you have the resources, chop your e-mail list up in order to test different subject lines/messages/formats to see which are most effective at generating opens and clicks.

Posted on 08/14/09 05:02 PM by Alex Adrianson

RightOn!

We’re heading up to Pittsburgh today for the RightOnline conference—the annual confab of conservatives doing online activism—which officially runs Friday and Saturday. We plan talk to some people, listen to some seminars, take the measure of the crowd, get the lay of the land, suss out the zeitgeist … you get the idea. Seriously, we’ll blog about the goings-on up there and share any nuggets of wisdom we come across. So stay tuned!

Posted on 08/13/09 02:35 AM by Alex Adrianson

The Threat from Al Qaeda Evolves

“Al Qaeda does not possess the organizational strength it had eight or 10 years ago,” writes Sebastian Gorka in Foreign Policy magazine, “but …

al Qaeda’s ideology is not waning among the young and extreme. On the contrary, its “propaganda by the deed” continues to inspire new recruits and terrorist attacks, particularly outside the Arab world.

Recent nongovernmental data support this view of al Qaeda. In 2008, Salafi terrorism of the sort that al Qaeda inspires and directs reared its head thousands of miles from Iraq and Israel, in places such as the Philippines, Russia, Somalia, and Pakistan. According to figures reported by one U.S. think tank, the annual number of Islamist terrorist attacks tripled between 2004 and 2008, to nearly 600 incidents. Indeed, if attacks in Afghanistan, Iraq, and Israel are removed from the total, the trend over the same four-year period is even more startling, showing a quadrupling of Salafi-inspired attacks. And if you go back even further – back before 9/11, the Bush presidency, and the wars in Afghanistan and Iraq – the picture is shocking: a tenfold increase in annual terrorist attacks over the past decade.

What to do? Says Gorka:

The United States needs to go on the ideological offensive. In the culture of Islam, the question of a leader’s authenticity is paramount. Bin Laden and those who follow his Salafi worldview must be delegitimized. After the debacle that was strategic communications under the last administration, Washington must formulate a marginalization policy. A lead agency must be empowered by the White House, and it must coordinate a whole-of-government message that focuses primarily on the vast number of Muslim victims of terrorism, of al Qaeda’s brand of terrorism. The United States should focus less on concepts such as democracy and more upon the bloody reality that is the result of al Qaeda’s ideology. The United States will then soon discover that it is far easier to make al Qaeda and bin Laden look illegitimate and truly evil than it is to make everyone love America.

Posted on 08/13/09 02:18 AM by Alex Adrianson

The End Is Not Nigh

One of the things we’ve noticed about a lot of reporting—and, ahem, blogging—on policy issues is that there seems to be all bad news all the time, or at least most of the time. Here’s a positive note, via John Graham of the Pacific Research Institute: Though health care has eaten up a larger and larger share of national income over time, the U.S. standard of living has nevertheless risen steadily. In a recent paper, Graham writes:

From 1995 to 2008, personal consumption expenditure on health goods and services has grown from $4,601 to $5,716 (in constant 2005 dollars). However, the vibrancy and productivity of the U.S. economy resulted in personal consumption expenditure other than on health goods and services increasing from $18,745 per capita to $24,886 per capita (in constant 2005 dollars). This is an increase of more than $6,000 per capita or slightly less than $16,000 per household. [Emphasis added.]

Make no mistake, health care reform is needed. In the United States, consumers are generally insulated from the costs of their health care consumption, and the degree of that insulation has been rising over time. Reforms that bring price consciousness back into the health care marketplace can help moderate the growth in health care expenditures—and help ensure that we are getting value for our health care dollars.

But generally speaking, it doesn’t appear that we are becoming paupers because of our health care system. And—judging from the critical reaction that members of Congress are getting at town hall meetings around the country—neither does that message seem to be selling a massive new role for government in health care.

Posted on 08/13/09 01:14 AM by Alex Adrianson

A New Record for Cost of Government Day

In 2009, Americans will work 224 days before they have earned enough money to cover the total yearly cost of government—total government spending plus the costs of government regulations. That makes August 12 “Cost of Government Day,” according to this calculation, which is done every year by Americans for Tax Reform. The calculation for Cost of Government Day includes spending and regulation at all levels of government—federal, state, and local. 

This year’s Cost of Government Day is a record high, representing over 61 percent of national income. The previous record high was July 20, which was set in 1982. Last year’s Cost of Government Day was July 16.

The biggest factor pushing Cost of Government day so far back was obviously the $787 billion stimulus bill. Amazingly, though, even without that bill Cost of Government Day this year would still have been a record high of July 25.  

The value of ATR’s calculation is that it reminds us of the fact that costs don’t go away merely because we aren’t paying those costs directly in the form of taxes (or merely because regulatory costs never show up on an itemized bill). Government spending financed by debt is a cost to society just as is spending financed by taxes. The government can never spend more resources than the country has. Yes, that’s a truism—but why are some folks so determined to try to disprove it?

See Cost of Government Day 2009 Report, by Monika Ciesielska, Americans for Tax Reform.

Posted on 08/12/09 06:42 PM by Alex Adrianson

Pretty Darn Broke

“The United States is functionally bankrupt” says Mike Whalen, a policy chairman at the National Center for Policy Analysis. He writes today in the Washington Times:

Our on-the-books national debt is $11.6 trillion. But off-the-books federal debt, including Medicare and Social Security, is $107 trillion. This is not a made-up number; this is the money we should have in the bank, according to the federal government’s own accountants, to pay for our current promises to our retirees and future retirees, and this doesn’t include unfunded obligations that we have to the pensions and benefits promised to federal workers and veterans. Nor does it include huge unfunded pension and benefit obligations for other public employees at levels below the federal government.

But let’s just add the $11 trillion to the $107 trillion, and we get $118 trillion. These are big numbers but still just fifth-grade math. Now our total annual national output, or gross domestic product (GDP), is about $14.3 trillion. Total federal receipts, or income if stated in business terms, are about $2.5 trillion. This means that our debt to federal income ratio is about 47, and that ratio assumes that the federal revenues are free to retire the obligations, which they are not. We must pay for defense and a myriad of other programs. Again, in business terms, there is no free cash flow to pay these massive obligations.

Our total national private net worth, according to the Federal Reserve Board, is about $51.5 trillion. That means our federal unfunded liabilities represent 2.3 times our collective net worth. That’s pretty darn broke.

Posted on 08/11/09 01:48 PM by Alex Adrianson

A Complicated Plot

A new history of American conservatism is in the bookstores. It’s called The Conservatives: Ideas and Personalities throughout American History and it’s written by Patrick Allitt. Steven Hayward has a generally positive review of the book at The Weekly Standard, though he does question some of Allitt’s judgments, particularly including Teddy Roosevelt in the conservative pantheon. The difficulty in writing a history of American conservatism, says Hayward, is that “the different strains of conservative thought are difficult or impossible to reconcile.”

Not until the very last page does Allitt confront the central issue of American conservatism: Is it, as Louis Hartz’s famous thesis in The Liberal Tradition in America implied, merely a branch of liberalism, or something distinct and antithetical to liberalism? Allitt suggests the latter, writing that “it would be perverse [today] to voice an argument like Hartz’s.” But this question gets at the very heart of the fractiousness of the right, and it is by no means clear that even the main currents of conservatism represent a fundamental rejection of (or alternative to) liberalism rightly understood.

Allitt shouldn’t be faulted too much for punting on this issue, or giving it perfunctory treatment. The fault lines between pro-market classical liberals and champions of community, tradition, and authority mimic, in some ways, the clash between reason and revelation that was such an important part of the story of Europe for nearly two millennia. This story now plays out in America in a new form, mostly on the right, and is just as hard to resolve or synthesize as it was at the time of Thomas Aquinas.

Posted on 08/11/09 12:11 PM by Alex Adrianson

Rediscovering First Principles

What do principles have to do with politics? Come find out on August 24th at a constitutional colloquium hosted by the Federalist Society, The Heritage Foundation, and Hillsdale College. The all-day event features talks from David J. Bobb, Director of the Center for Constitutional Studies and Citizenship at Hillsdale College; Jonathan Bunch of the Federalist Society; Larry Arnn, President of Hillsdale College; and Matthew Spalding, Director of the Simon Center for American Studies at The Heritage Foundation.

More information: Rediscovering First Principles: A Constitutional Colloquium (agenda, registration).

Posted on 08/11/09 11:23 AM by Alex Adrianson

Lessons from Europe

A warning about government-run health care from Daniel Hannan, British member of the European Parliament:

If you decide to do this thing, you can’t do it experimentally for a year or two and then change your mind if it doesn’t work out. That isn’t our experience. That isn’t how the dynamic of the thing operates. One point four million people work for the British National Health Service. One point four million people. It is the third largest employer on the planet. The largest is the Chinese Red Army. The second largest is the Indian national railways. The third largest in the British NHS. And here’s the really scary statistic. Of that 1.4 million people, the majority are bureaucrats. There are more managers in that 1.4 million than there are doctors and nurses put together. … When you have that big a block of the electorate who feel that they have a vested interest in the status quo, you try and get any major party to go into an election promising a radical change. … Be absolutely certain before you make this change that you really do want to do it, because if it doesn’t work out, don’t imagine that people are then going to say: “Well, yeah; that’s alright; we’ll just go back to how it was.”

Watch the whole talk for more lessons from Europe’s statist economies.

Posted on 08/10/09 12:25 PM by Alex Adrianson

Global Warming Policy Is More Dangerous than Global Warming

There’s probably more information on global warming packed into the 40-minute documentary below than you could find surfing the Web for a month. It’s an excellent examination of the science of global warming, as well as, most importantly, the question of whether the policies proposed even make sense. A “must see” produced by the Competitive Enterprise Institute:

Posted on 08/07/09 11:14 AM by Alex Adrianson

Cash for Clunkers: If You’re Not Outraged, You’re Not Paying Attention to the Right Reporters

Our informal survey (we watched a little television) finds that the media is overwhelmingly of the opinion that “cash for clunkers” has worked well and will benefit the economy. That’s probably because so many reporters fail to heed Frederic Bastiat’s injunction to note the unseen as well as the seen—to consider all the effects of a policy on society as a whole, not just the immediately obvious benefits for a select group. Fortunately, there’s the DC Examiner’s Tim Carney, who does what a good reporter ought to do: trace the unseen consequences of cash for clunkers:

The first benefit of the subsidy is in boosting sales prices and lowering trade-in payments. It’s not as if dealers simply charge $4,500 less than they would have and pass the entire subsidy onto the buyer — dealers still charge as much for a new car and pay as little for a trade-in as their customers will allow. The subsidy is split between dealers and customers.

And who are the customers? Not poor people — they don’t shell out five figures for new cars. No, this is a middle-class to upper-middle-class subsidy, which is probably why politicians love it so much.

But the real benefit to business — and harm to the economy — comes after the car sale. The law requires the dealers destroy the “clunker” engine (which, to be eligible, was drivable upon trade-in), scrap the car and shred almost all its parts. This government-required waste reduces the supply of used cars on the road. Reduce the supply of drivable used cars, and you drive up the price of all cars.

This supply reduction is the real stimulus for automakers and new-car dealers, and it comes at the expense of every consumer who didn’t take advantage of Cash for Clunkers — especially those who can’t afford a new car. The program taxes used-car buyers to subsidize new-car buyers.

If you carry this analysis one more step, you see that used car dealers must also be a beneficiary of the program, since all the cars that remain on their lots must become more valuable when the supply of used-but-still-drivable cars is reduced. “Cash for used car dealers”—how popular does that sound?

Posted on 08/06/09 06:13 PM by Alex Adrianson

The Cost-Control Illusion of a Public Option

Does Medicare provide an example of how government insurance can control costs better than private health insurance? The idea that it does is a key argument supporting the case for the Democrats’ health care reform plans, but Robert Book provides a thorough debunking of this notion in a new paper for The Heritage Foundation. Several points are worth pulling out:

1. Medicare’s cost growth is lower because it pays a declining share of the total health care expenses of Medicare beneficiaries, not because overall health care costs for those beneficiaries are being kept in check. The chief factor here is that the Social Security retirement age is rising, and more people are delaying retirement. That means more people are retaining employer-provided coverage even as they become Medicare beneficiaries. For this group, employer-provided insurance picks up most of their health care bills. Further, Medicare enrollees have been paying for an increasing share of their health expenses out-of-pocket, which has also kept Medicare cost growth in check. When all private sources of payment for health care are included in the comparison, per capita health care expenditures for Medicare enrollees have grown faster than those for people covered by private payment only. For the period 1997-2005, total per capita health care expenses for Medicare enrollees grew 10.6 percent annually; the figure for those covered by private payment only is 7.7 percent annually.

2. Medicare’s administrative costs appear low as a percentage of total Medicare spending because Medicare has more expensive patients. Medicare patients are by definition elderly and/or disabled and therefore incur more health care expenses, which makes administrative costs appear low as a percentage of total costs. But it certainly does not follow that a Medicare-like public plan could maintain that same low percentage of administrative costs if it also covered healthier populations. A better comparison is administrative costs per beneficiary. On that basis, private plans come out way ahead. (See Table 3 of Book’s paper.) Calculating administrative costs per beneficiary from 2000 to 2005, Book finds that Medicare was more expensive than private health insurance in each of those years, with a high of 48.4 percent more expensive in 2000.

3. The proponents of the public plan option tout the ability of the government to bargain with providers for lower prices, but history shows that providers almost always win the lobbying game for higher reimbursements. Since 2003, doctors are seven-for-seven in reversing scheduled updates to reimbursement formulas that would have lowered payments to doctors. In six of those cases they convinced Congress to approve an increase.

There are additional reasons to doubt that a public health insurance option will control health care cost growth. See “Illusions of Cost Control in Public Health Care Plans,” by Robert A. Book, The Heritage Foundation, July 24, 2009.

Posted on 08/06/09 05:22 PM by Alex Adrianson

Arthur Brooks: Why on Earth Do We Trust What the Government’s Economists Tell Us?

One of the reasons we’re seeing a lot of reaction against President Obama’s agenda, says American Enterprise Institute President Arthur Brooks, is that free enterprise is still a bedrock cultural value in the United States. Brooks took stock of the economic and political scene for the conservative bloggers briefing this week. Here are some of the highlights, filmed and compiled by Accuracy in Media:

Posted on 08/06/09 01:45 PM by Alex Adrianson

British Government Spends Taxpayer Money to Lobby British Government

In 2007-2008, various British government agencies spent over £37 million in taxpayer money lobbying other parts of the British government, according to a new study by the British Taxpayer’s Alliance. (Based on exchange rates for April 2007 – March 2008, £37 million is approximately $74 million.) That figure includes taxpayer money spent by government agencies on political consultants, trade associations, policy campaigns by activists organizations, and think tanks.

One recipient of British taxpayer largess was the New Economics Foundation, which was paid £601,518 in 2007-08. The New Economics Foundation publishes the Happy Planet Index, which places Saudi Arabia and Burma above the United Kingdom and Sweden in terms of “achieving, long, happy lives without over-stretching the planet’s resources.”

The United States has a similar problem with taxpayer funded lobbying even though there is a law against using federal funds for lobbying. This prohibition does not prevent state and local governments, public universities, transportation authorities, and water utilities from routinely lobbying for federal earmarks. Americans for Prosperity estimates that taxpayer-funded lobbying topped $138 million in 2007 and exceeded a $1 billion for the period 1998-2008.

As a percent of overall government spending, intergovernmental lobbying may be a small item, but it is still one of the most egregious abuses of the taxpayer; how often, do you suppose, is taxpayer-funded lobbying directed toward an agenda of cutting government spending?

Posted on 08/06/09 12:18 PM by Alex Adrianson

Arthur Laffer: Obamacare Will Increase Medical Inflation

Arthur Laffer, writing in the Wall Street Journal, provides a good brief of the argument against Obamacare: that by increasing government subsidies for health care, the reforms merely exacerbate the main problem with the health care system today, which Laffer calls the health care wedge:

The health-care wedge is an economic term that reflects the difference between what health-care costs the specific provider and what the patient actually pays. When health care is subsidized, no one should be surprised that people demand more of it and that the costs to produce it increase. Mr. Obama’s health-care plan does nothing to address the gap between the price paid and the price received. Instead, it’s like a negative tax: Costs rise and people demand more than they need.

To pay for the subsidy that the administration and Congress propose, revenues have to come from somewhere. The Obama team has come to the conclusion that we should tax small businesses, large employers and the rich. That won’t work because the health-care recipients will lose their jobs as businesses can no longer afford their employees and the wealthy flee.

The bottom line is that when the government spends money on health care, the patient does not. The patient is then separated from the transaction in the sense that costs are no longer his concern. And when the patient doesn’t care about costs, only those who want higher costs—like doctors and drug companies—care.

Laffer (along with Donna Arduin and Wayne Winegarden) has a more extensive paper for the Texas Public Policy Foundation with a bevy of charts and figures showing that government spending policies are driving health care cost growth. Here’s one compelling chart:

Prices for eyeglass services have increased more slowly than the overall price level in the past ten years, while health care services generally have experienced much higher price inflation. Why is that? Eyeglass services are less affected by third-party payment, and therefore consumers are more sensitive to prices. Laffer predicts that further insulating consumers from prices by adding $1 trillion in health care subsidies over the next ten years will add five percentage points or more to health care inflation. That’s the opposite of what the President says his health care reform plan will accomplish.

Posted on 08/05/09 12:46 PM by Alex Adrianson

Union Asks Obama to Kill Jobs

New tariffs on Chinese tires, as proposed by the U.S. International Trade Commission, would cost the United States at least 12 and possibly as many as 25 jobs per every one job saved in tire manufacturing, according to a report by Rutgers economist Thomas J. Prusa (as reported by the Wall Street Journal). While the tariffs might protect workers in tire-making, they would also induce a rise in tire prices and depress tire sales. Lower tire sales mean fewer jobs for people distributing and installing tires. While no time is good for job-killing tariffs, this would seem to be the worst possible time with unemployment hovering near 10 percent. But consider such policies the President must, because the politically powerful United Steelworkers has asked for the tariffs.

Posted on 08/04/09 11:40 AM by Alex Adrianson

Either Incentives Matter, or They Don’t

The teachers unions should be careful about the arguments they make against merit pay. Don Boudreaux, in a letter to the chairman of Fairfax County Public Schools, takes them at their word and comes up with a helpful suggestion for saving taxpayers millions of dollars: “slash teachers’ salaries by ten, twenty, even fifty percent or more.” Why not? If the prospect of higher pay won’t improve teaching performance, then it must follow that lower pay won’t hurt it.

Posted on 08/03/09 06:19 PM by Alex Adrianson

Is Hitting the Top 1 Percent Just Phase One?

Paying for a major new program with a tax targeted at only the top 1 percent of income earners—as the House health care bill does—should raise all sorts of good-government concerns, but there is also the practical problem of whether such a tax can produce the revenues to pay for the program. According to economist Bruce Bartlett, Congress is obscuring this issue by playing games with the 10-year budget window of the Congressional Budget Office. Writing in Forbes, Bartlett explains:

In the case of the House bill, the 10-year cost is a little more than $1 trillion, implying a cost of $100 billion per year. In fact, spending in the first three years is virtually zero. By the 10th year spending will be more than $200 billion and rising at 8% per year. This suggests that the cost of health reform will be more than three times greater in the second decade after enactment than the first.

However, CBO notes that revenue from the surtax is not likely to rise faster than the economy as a whole or about 5% per year. As a consequence, relative to current law, “the proposal would probably generate substantial increases in federal budget deficits during the decade beyond the current 10-year budget window.”

Of course, another possibility is that the 116th Congress raises taxes again and blames the 111th Congress.

Posted on 08/03/09 04:50 PM by Alex Adrianson

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