Sign Up For Our Mailing Lists


InsiderOnline Blog: August 2012

To Do

• An addendum to our back-to-school roundups: Definitely check out the new school choice programs that have been created around the country for the 2012-2013 school year. The August School Choice Advocate, published by the Friedman Foundation, provides a rundown.

• Find out whether state sovereignty can be preserved from an expanding federal government. The Heritage Foundation will host a discussion with the Attorney Generals of Alabama, Georgia, Indiana, and Oklahoma on September 14. The event runs from 11 a.m. to 12:30 p.m.

• Celebrate Constitution Day on September 18 by attending the Cato Institute’s conference examining the Supreme Court’s recent terms. The all-day program begins at 10:30 a.m. at the Cato Institute.

• Learn why classic literature matters, how it was emphasized by Massachusetts’s education standards, and how national education standards threaten that commitment. The Pioneer Institute will host authors Jocelyn Chadwick and Ron Powers on September 19. The event begins at 8 a.m. at the Omni Parker House in Boston.

Posted on 08/31/12 10:44 AM by Alex Adrianson

Is Sweden Really an Example of a Successful Social Welfare State?

A new paper by Nima Sanandaji takes on this question, finding that free markets have played a much bigger role in Sweden’s success than people typically realize. The paper concludes in part:

Sweden shifted to radical social democratic policies in the 1960s and 1970s, with a gradual reversal beginning in the mid 1980s. The social democratic period was not successful, as it led to much lower entrepreneurship, the crowding out of private sector job production and an erosion of previously strong work and benefit norms. The move towards high taxes, relatively generous government benefits and a regulated labour market preceded a situation in which Swedish society has had difficulty integrating even highly-educated immigrants, and where a fifth of the population of working age are supported by various forms of government welfare payments.

It is also important to remember that Sweden, like other Scandinavian nations, has compensated for policies of high taxes and welfare benefits by improving economic liberty in other fields. Some reforms, such as the partial privatisation of the mandatory pensions system and voucher systems in schools and healthcare surpass reforms in most developed nations. Since these reforms, and the reduction in taxes from the very-high levels of the 1970s to mid 1980s, Swedish relative economic performance has improved. [Institute of Economic Affairs, August 2012]

Posted on 08/31/12 09:58 AM by Alex Adrianson

PolitiFact Doesn’t Understand What a Fact Is

It continues to blow calls in ways that reveal liberal bias, notes National Review’s editors, including this big one:

PolitiFact said that Romney’s comment that Obama had “robbed” Medicare of $716 billion to pay for Obamacare was “mostly false.” Among its reasons: “The money was not robbed in any literal sense of the word.” So if Romney led anyone to believe that Obama had held Medicare at gunpoint and ordered it to hand over its wallet, they can now rest easy, because PolitiFact is on the case.

PolitiFact’s other arguments are that Medicare spending will continue to rise and that Obama’s spending reductions are “mainly aimed at insurers and hospitals, not beneficiaries.” Leave aside the economic naïveté of that argument, and focus instead on the irrelevance. Romney said that Obama had taken money that was going to be spent on Medicare and instead spend it on Obamacare, and suggested that this was a bad thing. In other words: an absolutely true claim, and an opinion based on it. If PolitiFact disagrees with that opinion, let it publish its views under a different name. [National Review, August 28]

Posted on 08/31/12 09:40 AM by Alex Adrianson

University of Texas Cancels Inquisition

Mark Regnerus’s study looking at how household structure (i.e., whether a family is headed by a heterosexual or a homosexual couple) affects children will not be investigated further for scientific misconduct, says the University of Texas at Austin:

Whether the research designed and conducted by Professor Regnerus and reported in Social Science Research possessed significant limitations or was even perhaps seriously flawed is a determination that should be left to debates that are currently underway in the academy and future research that validates or invalidates his findings. Professor Regnerus has stated that the data on which the research at issue was based will soon be made publicly available. At that time scholars can examine the data themselves and arrive at their own conclusions.

Since no evidence was provided to indicate that the behavior at issue rose to a level of scientific misconduct, no formal investigation is warranted. The issues raised […] fall within that portion of the University’s definition of scientific misconduct that states, “ordinary errors, good faith differences in interpretations or judgments of data, scholarly or political disagreements, good faith personal or professional opinions, or private moral or ethical behavior or views are not misconduct.” [Memorandum on the Regnus Inquiry Report by Robert A. Peterson, Research Integrity Officer, University of Texas at Austin, August 24]

Posted on 08/31/12 09:17 AM by Alex Adrianson

In a Hole

Wall Street Journal:

New income data from the Census Bureau, tabulated by former Census income specialists at the nonpartisan economic consulting firm Sentier Research, reveal that the three-and-a-half years of the Obama Presidency have done enormous harm to middle-class households.

In January 2009, the month President Obama entered the Oval Office and shortly before he signed his stimulus spending bill, median household income was $54,983. By June 2012, it had tumbled to $50,964, adjusted for inflation. […] That’s $4,019 in lost real income, a little less than a month’s income every year.

Unfair, you say, because Mr. Obama inherited a recession? Well, even if you start the analysis when the recession ended in June 2009, the numbers are dismal. Three years after the economy hit its trough, median household income is down $2,544, or nearly 5%.

Add the authors: “The overall decline since June 2009 was larger than the 2.6 percent decline that occurred” during the recession from December 2007 to June 2009. For household income, in other words, the Obama recovery has been worse than the Bush recession. [Wall Street Journal, August 24]

Posted on 08/31/12 08:32 AM by Alex Adrianson

Wisdom from John Locke

Freedom of Men under Government is, to have a standing Rule to live by, common to every one of that Society, and made by the Legislative Power erected in it; a Liberty to follow my own Will in all things, where the Rule prescribes not; and not to be subject to the inconstant, uncertain, unknown, Arbitrary Will of another Man: as Freedom of Nature is, to be under no other restraint but the Law of Nature.

John Locke was born this week in the year 1632. Happy 380th, Mr. Locke!

Posted on 08/31/12 08:23 AM by Alex Adrianson

Promoting Mediocrity

Using federal funding to encourage states to adopt national education standards has actually weakened standards in one state, say James Stergios, Charles Chieppo, and Jamie Gass. In August 2010, Massachusetts decided to ditch its own standards and adopt those of the so-called Common Core in order to obtain a $250 million grant from the Obama administration’s Race to the Top Initiative. Stergios, Chieppo, and Gass, all of the Pioneer Institute in Massachusetts, write in City Journal that the state’s previous set of standards, developed in the mid-1990s, had helped the state’s students become the first to score best in the nation in all four categories of the National Assessment of Education Progress test, a feat repeated four consecutive times, most recently in 2011. But:

The Pioneer Institute has published four independent, peer-reviewed studies comparing various drafts of the national standards with Massachusetts’s existing English and math standards. Pioneer’s findings were not kind to the national standards. Though each subsequent draft showed improvement, the studies found them far less rigorous than the previous Massachusetts standards.

In English, the national standards contain less than half as much classic literature as the Massachusetts framework. In math, they delay Algebra I from eighth until ninth grade and use an experimental method of teaching geometry that has not succeeded anywhere. There is no better authority on math than the National Mathematics Advisory Panel, which reviewed 16,000 research studies before issuing its final report in 2008. The NMAP found that algebra was the key to higher math study and that more students should get to Algebra I by eighth grade. In testimony submitted to the Texas state legislature, Stanford University professor emeritus of mathematics R. James Milgram, who conducted one of the Pioneer reviews, described “a number of extremely serious failings” in the national math standards, noting that they reflected “very low expectations.” [City Journal, Summer 2012]

Posted on 08/31/12 08:09 AM by Alex Adrianson

Wrong Goal

Contrary to much media “fact checking,” the Obama administration’s rewriting of the 1996 welfare does amount to gutting the work standards, explains Robert Rector:

President Obama’s HHS will exempt states from the federal work requirements if they increase by 20 percent the number of TANF cases that lose eligibility due to increases in earnings, a measure called “employment exits.” […]

An increase in employment exits is almost always a reverse indicator of reducing welfare dependence. There is actually a strong positive correlation between an increase in employment exits and an increase in caseloads. In other words, the number of the employment exits generally rises when the size of the welfare caseload rises, and it falls when the caseload falls.

How can this be? The answer lies in routine caseload turnover. Even before the 1996 welfare reform, a modest number of households would regularly exit the AFDC rolls each month while a similar number would enter the rolls. Because of routine turnover, increased caseloads were generally accompanied by higher numbers of employment exits. […]

According to the Obama Administration’s preferred measure of welfare performance, the pre-reform AFDC system was a stunning success: Employment exits nearly doubled. By contrast, the post-reform TANF program was a failure because employment exits declined. [The Heritage Foundation, August 24]

Posted on 08/31/12 07:37 AM by Alex Adrianson

The Current Program Is Still Not Working

The numbers tell of a weak recover, says Bill Beach:

[Wednesday] morning’s update from the Department of Commerce on economic activity in the second quarter shows that the economy grew at an anemic 1.7 percent annual rate. This follows a nearly equally weak first quarter growth rate of 2.0 percent.

How weak is this? In terms of economic output, the current recovery is the weakest of any since 1945: Total output is only 6.8 percent higher than when the recession ended in 2009, which was about 12 quarters ago. Compare that to the other really big post-war recession: 1981. After 12 quarters, economic output stood 18.5 percent higher than the end of that recession. Even the really slow recovery from the 2001 recession outdoes the current one: By 12 quarters following the end of the 2001 recession, economic output was 8.9 percent higher. [The Foundry, August 29]

“Ballooning national debt, ineffective fiscal and monetary policies, and a $500 billion tax increase in 2013,” explains Beach, have “made the entrepreneurial spirit of American enterprise dive for cover.”

Posted on 08/29/12 05:24 PM by Alex Adrianson

Hooray for Drudgery? No

Ever notice that we celebrate Labor Day by not working? And you know what helps you get more done with less work? More capital. So, as Lawrence Reed suggests, maybe we should celebrate Capital Day, too:

Capital without labor means machines with no operators, or financial resources without the manpower to invest in. Labor without capital looks like Haiti or North Korea: plenty of people working but doing it with sticks instead of bulldozers, or starting a small enterprise with pocket change instead of a bank loan.

Capital can refer to either the tools of production or the funds that finance them. There may be no place in the world where there’s a shortage of labor but every inch of the planet is short of capital. There is no worker who couldn’t become more productive and better himself and society in the process if he had a more powerful labor-saving machine or a little more venture funding behind him. It ought to be abundantly clear that the vast improvement in standards of living over the past century is not explained by physical labor (we actually do less of that), but rather to the application of capital. […]

Don’t think of capital as something possessed and deployed only by bankers, the college-educated, the rich, or the elite. We workers of all income levels are “capital-ists” too—every time we save and invest, buy a share of stock, fix a machine, or start a business. [Foundation for Economic Education, August 27]

Posted on 08/27/12 02:09 PM by Alex Adrianson

To Do

• Check out the all-new Heritage mobile app. Among the new features: a really handy way to share multiple links to Heritage content via e-mail.

Learn about the risks and myths of cohabitation. Mike McManus and Pat Fagan will talk at the Family Research Council at noon on August 30.

• Teachers need to get ready for school, too. As we’ve noted, saving the republic starts in the classroom. There are some excellent resources for teachers out there. Here’s a few: Izzit.org provides educational videos on dvd—with an emphasis on economics—which you can preview at the Izzit YouTube channel. The Foreign Policy Research Institute has classroom lessons for teaching the history of the U.S. military. The Ashbrooke Center’s We the Teachers blog highlights great resources for history teachers. The Heritage Foundation’s First Principles Web site contains essential readings on the American Founding, including many primary documents. We’ve also heard on the grapevine that the Victims of Communism Memorial Foundation is preparing a curriculum on Communism for high school teachers. Watch for that announcement at VictimsofCommunism.org.

• Help honor Ambassador J. William Middendorf, II for half a century of distinguished service to the United States as Ambassador, Secretary of the Navy, business leader, Navy veteran, and champion of conservative principles. A tribute dinner will be held at the Metropolitan Club of Washington, D.C., with a reception starting at 6 p.m. on September 12, 2012. To attend, RSVP by September 5. For more information, e-mail specialevents@heritage.org.

Posted on 08/24/12 03:21 PM by Alex Adrianson

The Facts on the Deficit

In 2001, the Congressional Budget Office projected the federal government would run significant surpluses for at least a decade. Tax cuts are sometimes blamed for the deficits that were actually run in the 2000s, but the problem was mainly spending, as Charles Blauhous shows in a new analysis based on the Congressional Budget’s Office’s own numbers. Here’s the bottom line:

Roughly half of the reason the surpluses never materialized is that federal spending was subsequently increased (over half of this total increase was concentrated in the three years of 2009-11). A little over one-quarter disappeared because of subsequent corrections to the 2001 projections. Less than one-quarter was due to tax relief of any kind – and only a little more than half of that small fraction is directly attributable to the 2001 and 2003 tax relief packages. [e-21, August 20]

Posted on 08/24/12 02:06 PM by Alex Adrianson

History Lesson: The Republican Convention of 1912

With its focus on preserving the Constitution as a limit on government, the Tea Party today has much in common with William Howard Taft, Elihu Root, and Henry Cabot Lodge. Yes, the Taft wing of the Republican Party lost the 1912 election to Woodrow Wilson, but it accomplished something even more important at the Republican convention that year: Keeping Theodore Roosevelt, with his program of radical constitutional reform, off the GOP ticket. William Schambra explains:

What Taft, Root, Lodge, and others could not have known, but certainly must have hoped, was that the tide of progressive constitutional reform had in fact crested in 1912 and would begin to fall almost immediately. It would never again in American history rise to such levels of popular political support or come so close to capturing the apparatus of the predominant political party.

Even in the depths of the Great Depression and faced with a Supreme Court that wielded the Constitution freely against his programs, Franklin D. Roosevelt refrained from suggesting that massive, explicit constitutional reform was necessary. The one time he tried to tinker with the constitutional system through his “court-packing” scheme, he was dealt a sharp setback by Congress and later by the people in the ensuing mid-term elections. As historian George Mowry noted, the 1912 Progressive platform’s “content of political reform outweighed those proposed by either the later Roosevelt or Truman”

The importance of denying TR the nomination can be understood by considering how different things would have been had he won the presidency and driven through Congress and the states just one piece of his reform platform: that relating to an easier and more efficacious method of amending the Constitution. Today’s Constitution would no doubt be almost unrecognizable, running to hundreds of pages and filled with each succeeding generation’s peculiar notions of what seemed on the spur of the moment to rise to constitutional status, but which would surely have been turned aside by the demanding Article V process after cooler heads had prevailed. [Internal citations omitted.] [Heritage Foundation, August 20]

Posted on 08/24/12 01:44 PM by Alex Adrianson

Behold, the Taxman Comes as a Thief

We’ve been calling the group of tax increases set to take effect on January 1 Taxmaggedon. We think that has a better ring than “Tax Nirvana.” Now, the Congressional Budget Office’s latest projections confirm we’re not headed for economic bliss:

A host of significant provisions of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Public Law 111-312) are set to expire, including provisions that extended reductions in tax rates and expansions of tax credits and deductions originally enacted in 2001, 2003, or 2009. […] With those and other policy changes contained in current law, the deficit will shrink to an estimated $641 billion in fiscal year 2013 (or 4.0 percent of GDP), almost $500 billion less than the shortfall in 2012 […] . Such fiscal tightening will lead to economic conditions in 2013 that will probably be considered a recession, with real GDP declining by 0.5 percent between the fourth quarter of 2012 and the fourth quarter of 2013 and the unemployment rate rising to about 9 percent in the second half of calendar year 2013. [“An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022,” Congressional Budget Office, August 2012]

Posted on 08/24/12 12:32 PM by Alex Adrianson

Bag Bans Kill

Deaths and emergency room visits caused by food-borne illness or intestinal infections spiked in San Francisco following the city’s ban on plastic grocery bags, notes Jonathan Klick, a researcher for the Property and Environment Research Center. [The Percolator, August 21] Some say reusable cloth bags are good for the environment, but it appears that without regular washing they are pretty unhealthy as a tote for groceries. Consider these study results:

Reusable bags were collected at random from consumers as they entered grocery stores in California and Arizona. In interviews, it was found that reusable bags are seldom if ever washed and often used for multiple purposes. Large numbers of bacteria were found in almost all bags and coliform bacteria in half. Escherichia coli were identified in 8% of the bags, as well as a wide range of enteric bacteria, including several opportunistic pathogens. When meat juices were added to bags and stored in the trunks of cars for two hours, the number of bacteria increased 10-fold, indicating the potential for bacterial growth in the bags. Hand or machine washing was found to reduce the bacteria in bags by > 99.9%. [Food Protection Trends, August 2011, quoted at International Association for Food Protection]

Posted on 08/24/12 12:02 PM by Alex Adrianson

School Choice and College Attendance

From Matthew Chingos and Paul Peterson, some evidence that the New York School Choice Scholarships Foundation Program has helped African-American students:

We find no overall impacts on college enrollments but we do find large, statistically significant positive impacts on the college going of African American students who participated in the study. Our estimates indicate that using a voucher to attend private school increased the overall college enrollment rate among African Americans by 24 percent. […]

In the absence of a voucher offer, the percentage of African American students who attended a selective four-year college was 3 percent. That increased by 3.9 percentage points if the student received the offer of a voucher, a better than 100 percent increment in the percentage enrolled in a selective college—a very large increment from a very low baseline. […]

We find suggestive evidence that educational and religious reasons may explain the different findings for African American and Hispanic students. Although it would be incorrect to say that educational objectives were not uppermost in the minds of respondents from both ethnic groups (as respondents from both groups made it clear that such was the case), the weight given different objectives appears to have differed in some respects. African American students were especially at risk of not going on to college, and families sought a private school—even one outside their religious tradition—that would help their child overcome that disadvantage.

Their study is “The Effects of School Choice Vouchers on College Enrollment: Experimental Evidence from New York City[Brookings Institution, August 2012].

Posted on 08/23/12 10:22 PM by Alex Adrianson

Get the Argument Straight

Being pro-free market unfortunately is often confused with being against government taking action in response to recession. Sheldon Richman:

Given the corporatist nature of the economy, it is a mistake—as well as strategically foolish—to say the government should do nothing when a recession might be coming on or when recovery is disappointingly sluggish. There’s much it should do—or rather undo. Freedom’s advocates must spell this out in detail, revealing how existing government privilege harms the mass of people who have no political connections. In contrast, when an economist who proclaims his support for the free market says the current economy will fix itself, he brands himself a defender of the statist quo and turns his back on the State’s victims.

The freedom philosophy is a radical idea that looks ahead, rather than to some mythical golden era or Panglossian present. Every time we pass up an opportunity to make this point, we alienate potential allies who are concerned about those who are having a tough time of things. Yes, living standards have improved for decades and being poor in the United States is not what it used to be—thank goodness. That only shows that even a marketplace hampered by government privilege can produce astounding wealth. But to be satisfied with that is to be willing to trade freedom and justice for a mess of pottage. [Reason, August 19]

Posted on 08/23/12 10:00 PM by Alex Adrianson

Aiming for the Rich, Hitting the Poor

“[H]igh tax rates are the worst way to redistribute income to the poor and the middle class,” writes Stephen Moore:

In 1972, when the highest tax rate on the rich was 70 percent and the top capital-gains tax rate was 35 percent, the richest 1 percent of Americans assumed 18 percent of the income-tax burden. Today, with a top income-tax rate of 35 percent and a capital-gains rate of 15 percent, their share is 39 percent, more than twice as much. This is true because, faced with high tax rates, the rich of 40 years ago put more of their income into tax shelters or foreign countries. They invested less, and they worked less. And the rest of us suffered during the years of stagflation—as we will again, if rates are raised.

Even though taxes are 10 to 20 percent lower in the United States than they are in most other industrialized nations, the U.S. government is more dependent on rich people for taxes than are many of the more socialized economies of Europe. According to the Tax Foundation, the U.S. gets 45 percent of its total federal taxes from the top 10 percent of tax filers, whereas the average for industrialized nations is 32 percent. America’s well-off bear a larger share of the tax burden than do the rich in Belgium (25 percent), Germany (31 percent), France (28 percent), and Sweden (27 percent).

Moore’s “The U.S. Tax System: Who Really Pays?” [Manhattan Institute, August 2012] provides lots more debunking of arguments for higher taxes.

Posted on 08/23/12 09:50 PM by Alex Adrianson

Do We Spend Too Little on the Poor?

That doesn’t seem to be the case, says Robert Rector:

For two decades, means-tested welfare has been the fastest growing category of government spending – it has increased by 30 percent since President Obama took office.

Given the severity of the recession, it’s possible that the increase in need may have outstripped this rapid spending growth. But the available evidence suggests otherwise. The best measure of need is the annual “poverty deficit” – the amount of money needed to eliminate poverty by raising the income of every poor household up to the poverty income threshold. During the recession, the annual poverty deficit has increased by $35 billion, from $137 billion in 2007 to $172 billion in 2010. Annual means-tested welfare spending jumped by $211 billion, reaching $881 billion in 2010.

So for every dollar of increased need, we’ve increased welfare spending by $6. [Washington Times, August 20]

Posted on 08/21/12 05:31 PM by Alex Adrianson

To Do: Back to School

Sadly, our interns have left us, which reminds us another school year is about to begin. You know what that means? Yep, pretty soon, all over this great country, college professors will be telling a new crop of students that the Constitution was a conspiracy of rich white men, that free markets caused the Great Depression, that truth is just a social construct, and that being a conservative is a hate crime. Students who want to learn, meet other conservatives, or get active fighting liberal bias on campus should keep these resources handy:

Students for Liberty will have a 15 regional conferences coming up this fall. The group also has a page of resources for getting active on campus, including tabling kits!

The Intercollegiate Studies Institute has a variety of resources for students interested in understanding America’s traditions of liberty, including online lectures, an honors program, support for student newspapers, and help getting conservative speakers on your campus.

The Heritage Foundation’s Young Leader’s Program offers a variety of resources to students interested in public policy, including regular online seminars with the best conservative public policy thinkers.

• The Network of enlightened Women, with dozens of chapters of conservative women across the country, does great things on campus such as promoting respect for women.  

• The Benjamin Rush Society teaches medical students about free market health care reform.

• The Federalist Society is the place to go for law students seeking to understand the connection between liberty and law.

• Use CampusReform.org to find other conservative students at your school, and to report teachers and administrators who abuse their authority in order to promote leftist causes.

• The Young America’s Foundation has regular conferences and helps conservative students on campus with a variety of resources, including The Conservative Guide to Campus Activism.

• Check in with the Foundation for Individual Rights in Education for regular updates on the state of academic freedom on Ameica’s campuses.

Accuracy in Academia keeps track of crazy things professors say. Maybe you’ll find an article about your professor there.

The Institute for Humane Studies is the place for students who want to learn more about libertarian ideas.

• And if you happen to care what the Constitution actually says, you can’t go wrong picking up a copy of Hillsdale College’s new The U.S. Constitution: A Reader.

Next week we’ll offer some resources for teachers for the coming school year.

Posted on 08/20/12 04:34 PM by Alex Adrianson

Lower Payments Do Mean Fewer Doctors

Obama didn’t cut anybody’s health care; he just cut payments to doctors, which is really like cutting corporate welfare—so goes the liberal argument on Obama’s Medicare cuts. In case you were wondering whether government can cut doctor payments in a health care program while making no other changes and have patients be unaffected, the answer is: no. A report on state Medicaid reimbursements:

New Jersey had the nation’s lowest rate [of doctors accepting Medicaid patients] at 40 percent, while Wyoming had the highest, at 99 percent, according to a survey last year of doctors by the U.S. Centers for Disease Control and Prevention.

For years, some states have struggled to attract doctors to treat patients enrolled in the state-federal health insurance program for the poor, largely because of their low pay. New Jersey’s reimbursement rate for Medicaid doctors, compared to what Medicare pays, is the lowest in the nation, according to the study. [Kaiser Health News, August 6]

Posted on 08/17/12 04:11 PM by Alex Adrianson

Government Will Take Almost Half Your Paycheck in 2013

… says Patrick Tyrell, who calculates how Taxmaggeddon will pile new taxes onto the taxpayer’s already high burden:

A middle-class taxpayer’s income is subject to a 25 percent federal income tax. Then there is the federal Social Security and Medicare payroll tax of 13.3 percent in 2012—5.65 percent of that is removed from the employee’s paycheck, and the remaining 7.65 percent is paid by the employer. (In reality, the employee pays the entire 13.3 percent, because the employer’s portion of the tax does not affect the cost of labor: The employer would pay the employee 7.65 percent more if there were no employer’s portion of the payroll tax.)

So the 25 percent federal income tax plus 13.3 Social Security and Medicare payroll taxes equals 38.3 percent going to federal taxes in 2012.

And then there are state taxes. According to the Tax Foundation, the average state’s income tax rate for the middle-class taxpayer is 4.82 percent, which brings the total to 43.12 percent in federal and state taxes. And it’s going higher, thanks to the nearly $500 billion in tax increases for 2013 that some have called Taxmageddon. In January of next year, the federal income tax rate for middle-class taxpayers is scheduled to rise from 25 percent to 28 percent, and the payroll tax is scheduled to rise from 13.3 percent to 15.3 percent. This drives the marginal tax rate based on the aforementioned three taxes to 48.12 percent. Add in state and local property, corporate, excise, and other state and local taxes, and the percentage of each additional dollar that is taxed hovers around 50 percent. [The Foundry, August 13]

To find out the impact of Taxmaggeddon in your state, check out the chart that the Tax Foundation published earlier this month [Tax Foundation, August1].

Posted on 08/17/12 04:02 PM by Alex Adrianson

The War on the First Amendment Continues

Walter Olson at Overlawyered notes one particularly egregious overreach by a local government:

Shelby County (Memphis) has subpoenaed the identity of the authors of 10,000 anonymous comments at the city’s major newspaper, the Commercial Appeal. Some of the comments, on a school consolidation plan, exhibited racial animus, and the county may be planning to seek the striking down of a particular law on the grounds that the lawmakers who enacted it were influenced by citizens displaying improper animus. [Overlawyered, August 16]

Posted on 08/17/12 03:53 PM by Alex Adrianson

Do the Olympics Give Host Cities a Boost?

What happens after cities spend hundreds of millions of dollars sprucing themselves up to host the Olympics? A photography project called The Olympic City, chronicles post-Olympic life for host cities; judging from the photos, much of the infrastructure created for the Olympics goes to waste.

Here for example, is a train station built for the 1972 Olympics in Munich:

The project contains many more photos of Olympic venues after the games end. Check them out. [via Katherine Mangu-Ward, Reason, August 15]

Posted on 08/17/12 03:44 PM by Alex Adrianson

Johnny Munkhammar, RIP

Johnny Munkhammar, an advocate for freedom and free markets and member of the Swedish Parliament, died on Monday after a three-year battle with cancer. Before getting elected to Parliament, Munkhammar was a frequent lecturer and author with the Swedish free market think tank, Timbro.

One of his favorite themes was that political observers had learned the wrong lessons about socialism and the “Swedish Model.” He wrote in the Wall Street Journal last year:

The simple truth is that Sweden is not socialist. According to the World Values Survey and other similar studies, Sweden combines one of the highest degrees of individualism in the world, solid trust in well-functioning institutions, and a high degree of social cohesion. […] It’s true that Sweden wasn’t always so free. But Sweden’s socialism lasted only for a couple of decades, roughly during the 1970s and 1980s. And as it happens, these decades mark the only break in the modern Swedish success story. [Wall Street Journal, January 26, 2011]

Munkhammar frequently brought his free market message directly to the United States, working with think tanks such as the Cato Institute, the American Enterprise Institute, and The Heritage Foundation. At the Cato Institute, one can find a video of Munkhammar telling an audience in 2007 that the right lessons to learn form the Scandinavian countries is that free markets work. Munkhammar wrote a chapter on the need for labor freedom for The Heritage Foundation/Wall Street Journal 2007 Index of Economic Freedom. In a 2012 paper for the American Enterprise Institute, where he was a visiting fellow, Munkhammar argued that European governments had sacrificed future growth by responding to the financial crisis with increased spending. We were fortunate to be able to publish an article by Johnny in the Spring 2008 issue of The Insider:What the West Can Learn from Eastern Europe About Reform.”

Munkhammar friend of colleague Fredrik Segerfeldt writes:

During his (almost) 38 years, Johnny accomplished at least twice as much as most people do in twice as long life spans. Not only did he write numerous books, give lectures to top decision makers around the world, and win a seat in the Swedish Riksdag. He also started a lovely family, leaving his wife, Linda, and two wonderful daughters, Rebecka and Paulina, behind. Johnny will be dearly missed by thousands of fans of liberty, by hundreds of friends and most of all by his family. [Munkhammar.org, August 14]

Posted on 08/17/12 01:44 PM by Alex Adrianson

Who Wants to Cut Medicare?

You may have heard some accusations about cutting Medicare this week. Actually, cutting Medicare has already been written into the law since 1997. Current law ratchets down doctor reimbursement every year, and every year Congress votes to put off the adjustment because it knows that cutting doctor payments will make it harder for seniors to find a doctor. ObamaCare preserves those cuts to doctor payments, but the law’s defenders would have us believe that the laws of supply and demand now work differently. But, as Grace-Marie Turner points out at National Review: 

According to Medicare actuaries, [the cuts to doctor payments] would mean that 40 percent of providers eventually will either go bankrupt or stop seeing Medicare patients altogether.

To make sure that these spending targets are met, Obamacare creates the dreaded Independent Payment Advisory Board to enforce the cuts — and even more if needed. The IPAB puts the thumb screws in the Obamacare strategy, because the law makes it nearly impossible for Congress to override the board’s orders and shields the board’s decisions from judicial review — and patient input.

Yes, Paul Ryan, newly minted Republican Vice-Presidential candidate, also had a plan to bring down Medicare spending, essentially by voucherizing Medicare and letting private providers compete. Turner points out there are reasons to think that competition might actually work:

The market model has been proven to work in the Medicare Advantage and prescription-drug programs. Three Harvard researchers published a study in The Journal of the American Medical Association […] examining how premium support would have worked if it had been in effect in 2009. They found that, nationally, the benchmark plan bid an average of 9 percent below traditional Medicare costs.

Further, the Part D prescription-drug program in Medicare is saving taxpayers money and giving seniors better benefits. Seniors can choose the drug plan that offers them the best benefits at the lowest prices, and these smart shoppers have brought the cost of the program 42 percent lower than expected when the drug benefit was created in 2003. [National Review, August 17]

Posted on 08/17/12 11:15 AM by Alex Adrianson

Doctor Shortage Coming

ObamaCare is going to create a two-tiered health care system that leaves the poor and vulnerable with less access to care than before, predicts John Goodman:

Within the decade after [Jan 1, 2014], an additional 30 million people are expected to acquire health plans—and if the economic studies are correct, they will try to double their use of the health-care system. […]

As physicians increasingly have to allocate their time, patients in plans that pay below-market prices will likely wait longest. Those patients will be the elderly and the disabled on Medicare, low-income families on Medicaid, and (if the Massachusetts model is followed) people with subsidized insurance acquired in ObamaCare’s newly created health insurance exchanges.

Their wait will only become longer as more and more Americans turn to concierge medicine for their care. Although the model differs from region to region and doctor to doctor, concierge medicine basically means that patients pay doctors to be their agents, rather than the agents of third-party-payers such as insurance companies or government bureaucracies. […]

A typical primary-care physician has about 2,500 patients (according to a 2009 study by the Centers for Disease Control and Prevention), but when he opens a concierge practice, he’ll typically take about 500 patients with him (according to MDVIP, the largest organization of concierge doctors): That’s about all he can handle, given the extra time and attention those patients are going to expect. But the 2,000 patients left behind now must find another physician. [Wall Street Journal, August 14]

Posted on 08/15/12 06:33 PM by Alex Adrianson

Nothing to See Here, Just a Couple Earthquakes

The Iranian government doesn’t seem particularly to care about its people—not the ones hit by two 6.4 magnitude earthquakes, anyway. Ali Alfoneh reports:

The Islamic Republic of Iran Voice and Vision did not report on the quakes in their news coverage Saturday and Sunday morning. Adding insult to injury, the state controlled television channels transmitted the Olympics and stand up comedies while people in northwestern Iran were struggling for their lives. Major newspapers such as Kayhan, Resalat and Abrar totally ignored the disaster in their Sunday issues.

The behavior of Iran’s political leaders was even worse. Supreme Leader Ali Khamenei issued a late—and very short—letter of condolence, which was much more than President Mahmoud Ahmadinejad, who left Iran after the first quake two days ahead of a scheduled visit to Saudi Arabia and did not even issue a simple letter of condolence!

But never fear, Iran’s Crisis Management Center has “signed memoranda of understanding with theological seminaries in Qom, Mashhad, Isfahan and Shiraz so that the theological seminaries utilize the role of spirituality in order to reduce natural disasters…” [AEIdeas, August 13]

Posted on 08/14/12 05:50 PM by Alex Adrianson

So How Much Does the Federal Government Spend on Conferences for Employees?

Not even the Office of Management and Budget know the answer to that one, and this is the agency that is supposedly cracking down on excessive conference spending following the revelations about a lavish conference in Las Vegas for employees of the General Services Administration. Mark Flatten reports:

After the Las Vegas conference hit the front pages in April, OMB ordered cabinet-level departments to suspend employee events costing $100,000 or more, pending reviews by top agency officials. Spending details on the conferences were to be posted online.

Conferences costing more than $500,000 were banned unless “exceptional circumstances exist” and the department head waived the ban in writing.

But there’s a catch: OMB doesn’t require Cabinet departments to post costs online until 2013, and all they have to do with the signed justifications is keep them on file at the agency.

So there’s still no one place taxpayers can look for the total amount Washington spends in a year hosting conferences. […]

The Examiner filed Freedom of Information Act requests with major agencies and departments seeking spending documents for recent and planned conferences. So far, none has produced them.

The Examiner also attempted to determine federal conference costs using publicly available federal databases like the Federal Procurement Data System. But such data is incomplete and inconsistent because of variations in how different expenses are reported. [The Washington Examiner, August 13]

Posted on 08/13/12 05:39 PM by Alex Adrianson

To Do: Things to Do in Denver When You’re Free

• Shoot, smoke, and drink! The Independence Institute’s 10th Annual Alcohol, Tobacco, and Firearms Party is this Saturday. No, this event is not actually in Denver, but in nearby Bennett at the Kiowa Creek Sporting Club. David Martosko, Executive Editor of the Daily Caller, will be the keynote speaker.

• Put CPAC Colorado on your calendar. The western edition of the yearly Conservative Political Action Conference will be in Denver on October 4. Register today.

• Examine the role of the Department of Defense in supporting civil authorities responding to disasters. The Heritage Foundation will host the program “When the Next Catastrophe Strikes: Disaster Response and Defense Support to Civil Authorities,” featuring Assistant Secretary of Defense Paul N. Stockton, Vice Admiral Harvey E. Johnson  Jr. (USCG, Ret.), and James Jay Carafano. The program begins at 10 a.m. on Tuesday, August 14.

Posted on 08/10/12 04:00 PM by Alex Adrianson

What if a Blackout Lasted More than a Few Days?

Sure, 670 million people were without power last week in India, but the United States has even more reasons to worry about its electrical grid, says Glenn Harlan Reynolds (aka, Instapundit):

Modern civilization is astoundingly dependent on electricity. If the power goes out for very long, pretty much everything stops: water (you need pumps), gasoline (most gas stations don’t have backup generators to pump the gas), traffic (no stoplights), sewage (pumps again), and, eventually, even things like natural gas supplies (more pumps) and cellphone service (cell towers usually have backup power, but for most it’s only short-term). Stop the electricity for a day and it’s inconvenient; stop it for a few days and people die; stop it for a week or more over a big area and civilization itself is in peril.

The more advanced state of the U.S. grid is a mixed blessing. The ability to “wheel” power over long distances means that local problems can be ameliorated by power from elsewhere. But it also means that a failure in one area can, under the wrong circumstances, bring down service over wide areas. Modern smart-grid technologies currently being designed and deployed can make the power net nimbler and able to adapt more quickly to changes in loads. On the other hand, all that computerization makes the system more vulnerable to software bugs, viruses, cyber attacks, or even electromagnetic-pulse (EMP) damage from a solar storm or a nuclear attack.

Reynolds’ list of things to do includes hardening the infrastructure by, for example, burying power lines; increasing the stocks of replacement parts, which can take years to manufacture and must be imported from overseas; making sure the transportation system will allow “recovery” units to be moved into place; improving physical security against sabotage; getting battery backups in place so that if the grid does go down, we have at least have a few hours grace to make plans; and upgrading the backup power for critical systems like hospitals, utilities, and police. [Popular Mechanics, August 6; see also: “EMP Attacks—What the U.S. Must Do Now,” by James Jay Carafano and Richard Weitz, The Heritage Foundation, November 17, 2010]

Posted on 08/10/12 01:47 PM by Alex Adrianson

What’s That About There Not Being Even One Example of an Election Result Changed by Voter Fraud?

[Minnesota-Majority] identified 1,099 felons – all ineligible to vote – who had voted in the Franken-Coleman race.

Minnesota Majority took the information to prosecutors across the state, many of whom showed no interest in pursuing it. But Minnesota law requires authorities to investigate such leads. And so far, Fund and von Spakovsky report, 177 people have been convicted–not just accused, but convicted – of voting fraudulently in the Senate race. Another 66 are awaiting trial. “The numbers aren’t greater,” the authors say, “because the standard for convicting someone of voter fraud in Minnesota is that they must have been both ineligible, and ‘knowingly’ voted unlawfully.” The accused can get off by claiming not to have known they did anything wrong.

Still, that’s a total of 243 people either convicted of voter fraud or awaiting trial in an election that was decided by 312 votes. With 1,099 examples identified by Minnesota Majority, and with evidence suggesting that felons, when they do vote, strongly favor Democrats, it doesn’t require a leap to suggest there might one day be proof that Al Franken was elected on the strength of voter fraud.

And that’s just the question of voting by felons. Minnesota Majority also found all sorts of other irregularities that cast further doubt on the Senate results. [Washington Examiner, August 6]

That’s Byron York, discussing John Fund and Hans von Spakovsky’s new book, Who’s Counting? How Vote Fraudsters and Bureaucrats Put Your Vote at Risk, available next week from Encounter Books.

Posted on 08/10/12 01:01 PM by Alex Adrianson

A Handy Assumption

The point of recently proposed energy-efficiency regulations is not really to limit greenhouse gas emissions or protect the environment. That’s judging from cost-benefit analyses performed by the Environmental Protection Agency, the Department of Energy, and the Department of Transportation. Those analyses, according to Ted Gayer and W. Kip Viscusi, find that environmental benefits alone are not enough to justify the regulations. Instead, the analyses claim the regulations help consumers make better choices. Gayer and Viscusi summarize their recent review:

Our research examined the economic justifications provided by three agencies for a set of new energy-efficiency regu­lations (current energy-efficiency regulations were beyond the study’s scope).

The study found that the majority of the benefits claimed for these regulations were derived from correcting so-called consumer “irrationality.” In a departure from OMB standards for conducting benefit-cost analyses, the agencies claimed that consumers and firms make irrational purchasing decisions if energy efficiency is not the primary criterion when purchasing certain products. Thus, the agencies claim, by correcting this mistake, the regulations create benefits for consumers and firms by limiting choices to only those products that meet the agencies’ standards. […]

The only way these energy-efficiency regulations pass a benefit-cost analysis (BCA)—as required by OMB guide­lines—is if the agency conducting the analysis assumes that restricting consumer choice actually benefits con­sumers and firms. The assumption that consumers and firms (but not the regulators) are unable to make sound choices is counter to economic literature on public choice and consumer and firm behavior—and is also counter to OMB guidelines. [Mercatus Center, August 6]

Everybody is a consumer, and some consumers probably do believe that energy-efficiency regulations are a good idea. Of course, as the government’s analyses point out, those people are irrational.

Posted on 08/10/12 11:58 AM by Alex Adrianson

Dabbling in Economic Fiction

Science fiction writer David Brin this week provides yet another example of a very intelligent person who doesn’t know what he’s talking about when it comes to economics. His Ph.D. in Space Science didn’t saving him from completely botching Hayek, telling Wired:

[Friedrich Hayek] said that the absolute necessity of capitalism is for all the players to know all of what’s going on all the time, so they can make good capitalist decisions. Even a laborer in a factory, even a peasant, if that peasant knows everything that’s going on, then that peasant can make the best deal for the fish he just caught or the yam he just grew. The greatest hypocrisy on the planet right now is for those who defend capitalism to not be in favor of radical transparency, for all of us to know who owns everything. [Wired, August 8]

Don Boudreaux sets him straight:

Hayek observed that the amount of information necessary to make a modern economy work is unavoidably, and (we might say) radically, dispersed. It is spread in ever-changing tiny bits across thousands of miles and millions of minds. The great benefit of market prices is that each one summarizes for society at large a set of particular facts that can be known, in the case of each price, only to a handful of people. […]

For Hayek, market prices make economic order and growth possible despite each of us being ignorant of all but a minuscule fraction of the specific facts that must be taken account of for the economy to work well. The price system enables each person to act as if he possesses knowledge that, in fact, he does not possess – to act as if he knows what is known, in this case, only to a small number of strangers over here and, in that case, only to a small number of different strangers over there. [Cafe Hayek, August 8]

The fact that even very smart people make mistakes in fields with which they’re unfamiliar underscores the point that any system that requires everybody “to know all of what’s going on all the time” will fail. Fortunately, the price-coordination system (i.e., the free market) doesn’t make any such demands on humans.

Posted on 08/10/12 11:04 AM by Alex Adrianson

What Does It Mean, Really, to Promote Human Rights?

A war of words is going on over the upcoming Leon H. Sullivan Summit, to be held this month in Equatorial Guinea. The choice of location has been criticized as a betrayal of the ideals of civil rights champion Leon H. Sullivan. Here’s Thor Halvorssen, President of the Human Rights Foundation, and Ghanian economist George Ayittey explaining the problem:

Equatorial Guinea is home to Africa’s longest-ruling dictator, Teodoro Obiang Nguema, who seized power in a military coup by executing his uncle 33 years ago. Freedom House ranks the country among the “worst of the worst” human-rights abusers, along with North Korea, Syria and Somalia. Yet the Sullivan Foundation is celebrating its Obiang-hosted summit as a milestone for human rights, part of its “unwavering commitment to democratic ideals.” […]

Since his 1979 coup, Mr. Obiang has rigged every election to give himself more than 95% of the vote. He has criminalized dissent, tortured or disappeared his opponents, and killed tens of thousands […] . [The Wall Street Journal, August 8]

Now here’s Hope Sullivan Masters, Leon Sullivan’s daughter and current President of the Leon H. Sullivan Foundation, defending the decision:

The Leon H. Sullivan Summit is hosted in African countries, which are members of the African Union (AU). The AU serves as a vehicle whereby Africa can solve their [sic] own social and economic problems as well as other political issues and the many issues they [sic] face as a result of globalization. The African Union is Africa’s forum; it is a platform for the leaders of Africa, a unifying and strengthening coalition for the onward development and unification of Africa.

In January 2011, the President of Equatorial Guinea, OBIANG NGUEMA MBASOGO was elected to the Presidency of the African Union. As such, it seems ironic at best that the individuals who harbor such anger and hatred of President Obiang are discounting the fact that he was chosen to lead this august body of nations by the other leaders of Africa. [The Leon H. Sullivan Foundation, August 6, 2012]

It sounds as if the Sullivan Foundation has confused the rights of African governments with the human rights of Africans. Indeed, not once in Masters’ 1507-word explanation does she use the words “individual rights” or “liberty.” This confusion reminds us of another Sullivan—O’Sullivan to be precise. John O’Sullivan once said: “All organizations that are not actually right-wing will over time become left-wing.” We suggest a corollary to O’Sullivan’s law: All human rights organizations that are not actually founded to defend individual rights will over time become instruments of the state.

Posted on 08/09/12 11:17 PM by Alex Adrianson

DOJ Wins, Rule of Law Loses

This week the Department of Justice concluded its investigation of Gibson Guitars over the importation of (gasp!) hardwoods for use in the making of its guitars, but this moment was not a good one for the rule of law. DOJ and the company reached an agreement that requires Gibson to pay the National Wildlife Foundation $50,000; in return the company won’t be prosecuted under the Lacey Act, a law that requires U.S. companies to abide by the laws of other countries regarding the exportation of flora or fauna.

As Paul Larkin notes, it’s still not clear that Gibson violated any foreign law in the first place. For example:

The agreement alleges that Gibson received a translation (from whom is not stated) of the first whatever-it-is saying that “‘fingerboards’ are considered ‘finished’ under Madagascar law” and therefore may be exported. But, according to the government, “trip organizers”—who, for all we know, could have been Gibson’s trip companions “Greenpeace and other non-profit environmental groups”; the agreement does not say—informed Gibson that “under the organizers’ interpretation of [Madagascar’s] 2006 Interministerial Order, the harvest of ebony was illegal and that instrument part ‘blanks’ would be considered ‘unfinished’ and, therefore, considered illegal to export.” Put aside the obvious problems with government’s reliance on the opinion by the trip’s “organizers” of a foreign order written in a foreign tongue—Gibson was given conflicting views of the law. That should have ended the matter entirely. Remember: Gibson imported wood, not heroin. [The Heritage Foundation, August 7]

So why did the government pursue the case? K. William Watson suggests:

[P]roponents of the current restrictions in the Lacey Act include not just the predictable cadre of environmental organizations but also the American lumber industry and labor unions. […] Ultimately, the Lacey Act enables domestic suppliers to avoid price-squeezing import competition […] . [Cato-at-Liberty, August 8]

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

Inequality Narrative Debunked

The Left has gotten a long way down the road arguing for more redistribution with a few select facts on income inequality. Some of that argument has been already been debunked, but Lee Ohanian and Kip Hagopian continue the unraveling by synthesizing a lot of data in a recent article for Policy Review. Here are five points to take away:

1. Overestimating inflation has resulted in understating the real growth in incomes, and that understatement is larger for lower income earners. Using the Personal Consumption Expenditure Deflator instead of the traditional Consumer Price Index, Ohanian and Hagopian calculate that “real income growth in the first quintile was 40 percent higher, growth in the middle quintile was 24 percent higher, and growth in the fifth quintile was 8.6 percent higher” during the period 1979-2007.

2. Using an accurate measure of income—one that includes governments transfers, pensions, and health insurance, for example—income inequality has not changed in recent decades, undercutting the argument for higher tax rates. The authors: “[T]he Gini coefficient for comprehensive income during the period 1993–2009 (the period in which almost all of the Bush and Clinton tax cuts took effect) did not change.”

3. Measured income inequality is higher in the United States than in other countries, but so is the U.S. standard of living. It’s probably not an accident that letting individuals get rich gives us more innovations that make our lives a little more comfortable and convenient.

4. The U.S. tax code is already highly progressive: The top 1 percent earn 16.9 percent of the income but pay 36.7 percent of the taxes. For the top 5 percent, the figures are 31.7 percent of the income earned and 58.7 percent of the taxes paid. The bottom 50 percent earn 13.5 percent of the income, but pay only 2.3 percent of the taxes.

5. What’s a fair distribution? Those who say we need more redistribution almost never bother to answer that question. [Policy Review, August 2012]

Posted on 08/09/12 06:58 PM by Alex Adrianson

President Obama’s Economic Policies Have Caused 59,757 Premature Deaths—So Far

That’s Dan Mitchell’s back-of-the-envelope calculation. He figures (based on Congressional Budget Office and St. Louis Fed calculations) that the economy is $836.6 billion below potential gross domestic product, and (based on the work of Cass Sunstein and others) that one statistical life is lost for every $14 million reduction in national income. Divide the former number by the latter number and you get 59,757. No, it doesn’t make Obama a murderer, but the chain of reasoning here is far more valid than blaming an employer for the death of woman whose husband had been laid off years earlier and who had her own health insurance anyway. [International Liberty, August 8]

Posted on 08/08/12 06:44 PM by Alex Adrianson

Utah Stands Up to the Federal Education Leviathan

Utah isn’t signing up for national education standards just yet. On Friday, the Utah Board of Education decided to drop out of the Smarter Balanced Assessment Consortium, the national testing consortium that is working to implement Common Core standards. The state will still use the standards for the coming year, but may develop its own standards in subsequent years. [Deseret News, August 7]

If competition gives us smarter phones, faster computers, safer cars, and healthier food, why would we not expect it to deliver better education standards, too? Creating more competition in education standards is what Utah just did. Plus, can you imagine how much easier it would be for the National Education Association to get standards watered down if it had to lobby only the federal government instead of 50 state governments?

For more on why national standards are a bad idea, see “States Must Reject National Education Standards While There Is Still Time,” by Lindsey Burke, The Heritage Foundation, April 16, 2012; Controlling Education From the Top: Why Common Core Is Bad for America,” by Emmett McGroarty and Jane Robbins, Pioneer Institute, May 2012; and “Why National Standards Won’t Fix American Education: Misalignment of Power and Incentives,” by Lindsey Burke and Jennifer Marshall, The Heritage Foundation, May 21, 2010.

Posted on 08/07/12 04:26 PM by Alex Adrianson

ObamaCare by the Numbers

Some numbers to remember, via Aylene Senger:

• 20 million. The Congressional Budget Office (CBO) projects that as many as 20 million Americans could no longer have their current employer-based health coverage by 2019; others predict it could be as high as 35 million.
• 85 million. The Office of the Actuary at CMS estimates that, by 2020, Medicaid enrollment will increase from 54 million in 2010 to 85 million, pushing America closer to government-run health care.
• $1 trillion. Based on an updated CBO score, Obamacare imposes 18 new taxes or penalties totaling over $1 trillion from 2013 to 2022 that will directly or indirectly impact families, including those earning below $250,000.
• $1.683 trillion. Obamacare expects to spend over one-and-a-half trillion dollars between 2012 and 2022 on its coverage expansion provisions alone, according to the CBO.
• 30 million. Updated CBO estimates show that despite spending over a trillion dollars, Obamacare will leave 30 million Americans uninsured in 2021.
• 15. The number of unelected officials that will be in charge of cutting Medicare payments for millions of seniors under the Independent Payment Advisory Board in Obamacare. [The Foundry, July 30]

Posted on 08/06/12 06:30 PM by Alex Adrianson

To Do

• Explore the beautiful Gulf of Alaska on the Reason Seminar Cruise. The Ms. Westerdam sets sail from Seattle on August 11.

Learn how union bosses call the shots. Mallory Factor will talk about her new book, Shadowbosses: Government Unions Control America and Rob Taxpayers Blind. She’ll be at The Heritage Foundation at noon on Thursday, August 16.

Sort through the facts on inequality. Brian Domitrovic, Alan Reynolds, Scott Winship, and Dan Mitchell hash it out at the Cato Institute at noon on August 14.

Posted on 08/03/12 04:04 PM by Alex Adrianson

PolitiHack Strikes Again

Olympic medalists will have to declare their medals and the accompanying prize money as income and send the Internal Revenue Service a check, and for those who win gold, the tab could reach $9,000. Thanks for representing your country, Olympians!

That factoid, from Americans for Tax Reform [July 31], made its way into the political conversation this week, and was thus the subject of a Politifact effort at fact checking [July 31]. If you need further evidence that “fact checking” is often just opinion journalism in disguise, here it is. Politifact rated the ATR claim as “mostly false.” What did ATR get wrong? Not the claim that the medals themselves plus the accompanying monetary prize are taxable income. Also not in dispute is ATR’s calculation that if a gold medal winner finds himself in the top tax bracket of 35 percent, he will face a tax bill of $8,986.

According to Polifact, ATR’s claim earns a “mostly false” because not all medal winners will find themselves in the top tax bracket and because even those who do could lower their tax by deducting training expenses.

But as ATR points out, it never claimed all Olympic gold medalists would face an extra $9,000 in taxes. The group’s analysis said “U.S. Olympic medal winners will owe up to $9,000 to the IRS.” In its write up, Politifact even acknowledged that ATR’s careful choice of words limited the extent of its claim.

So, in spite of finding no factual errors, Politifact pronounced a “mostly false” rating on ATR’s claim. It’s almost as if Politifact’s “fact checkers” decided what conclusion they were going to reach before they did the research, and then stuck to that conclusion in spite of their research. But—nah, they would never do that!

ATR has a choice rebuttal on its Web site.

Posted on 08/03/12 03:40 PM by Alex Adrianson

“People Are the Most Important, Unique and Precious Resource”

That sounds like common sense, no? In 1996, however, a small group of environmental policy experts decided this essential point needed restating. Environmentalism had strayed very far from the idea that the point of environmental policy was to improve the environment so that people could live better. Instead, environmentalism shifted to the view that free, creative human beings are the enemy of nature, and therefore how they live their lives needs to be controlled.

The group of heterodox environmental experts pushed back with a statement of eight principles that became known as the American Conservation Ethic. The ethic said, among other things, that free people are the best stewards of the environment, that ownership of resources provides the best incentives to use natural resources wisely, that economic growth increases our ability to solve environmental problems, and that both the costs and the benefits of policies need to be considered. Judging from the Left’s drive today to make affordable energy scarce, and therefore keep more people in poverty, the lessons of the ethic still need to be learned. Fortunately, The Heritage Foundation has just published a new monograph that reaffirms and reapplies those eight principles to today’s environmental policy issues.

The publication, “Environmental Conservation: Eight Principles of the American Conservation Ethic,” addresses the topics of putting property rights back into environmental policy, improving regulations that protect our waters and our air, improving the protection of endangered species, fixing the government’s land management practices, the problems with regulating carbon dioxide emissions, and the limits of using international forums to address environmental problems. Give it a read.

Posted on 08/03/12 01:02 PM by Alex Adrianson

You’re Probably a Criminal, Too

It’s hard to imagine a better example of over-criminalization than the story of marine biologist Nancy Black and her legal tussle with the National Oceanic and Atmospheric Administration. As a recent George Will column recounts, Black’s troubles began when a whistle at a humpback on a whale-watching expedition led to an investigation of whether her crew had harassed a marine mammal. No harassment charges were brought, but she was charged with making a materially false statement to NOAA investigators for sending them an edited tape of the incident. From there the story gets plenty more ridiculous and of course Black has to cash out her life savings to pay her lawyers. Don’t think it can’t happen to you, too. Will:

In 1980, federal statutes specified 3,000 criminal offenses; by 2007, 4,450. They continue to multiply. Often, as in Black’s case, they are untethered from the common-law tradition of mens rea, which holds that a crime must involve a criminal intent — a guilty mind. Legions of government lawyers inundate targets like Black with discovery demands, producing financial burdens that compel the innocent to surrender in order to survive.

The protracted and pointless tormenting of Black illustrates the thesis of Harvey Silverglate’s invaluable 2009 book, “Three Felonies a Day: How the Feds Target the Innocent.” Silverglate, a civil liberties lawyer in Boston, chillingly demonstrates how the mad proliferation of federal criminal laws — which often are too vague to give fair notice of what behavior is proscribed or prescribed — means that “our normal daily activities expose us to potential prosecution at the whim of a government official.” [Washington Post, July 27]

Posted on 08/02/12 08:09 PM by Alex Adrianson

Guess Which Motor Company Is Leading the Way in Subprime Auto Lending

The answer is General Motors, the auto company of which taxpayers still own 26.5 percent, reports David Hogberg:

GM Financial auto loans to customers with FICO scores below 660 rose from 87% of total loans in Q4 2010 to 93% in Q1 2012. The worse the FICO score, the bigger the increase. From Q4 2010 to Q1 2012, GM Financial loans to customers with the worst FICO scores—below 540—shot up 79% to more than $2.3 billion. The second worst category, 540-599, rose 28% from about $3.4 billion to $4.3 billion. Prime loans, those above 660, dropped 42% to $676 million.

GM Financial provides just over 8% of GM’s financing. Prior to 2006, GM’s captive lending arm was GMAC, but GM sold a controlling stake in 2006. GMAC later renamed itself Ally Financial and continues to provide the bulk of GM’s financing. At the peak of the credit crisis and recession in late 2008, Ally announced that it would move away from subprime lending. By spring 2010 GM’s new management, led by North American executive Mark Reuss, wanted to move back into subprime, fearing that GM couldn’t compete. […]

[S]ince it acquired GM Financial, GM has seen its subprime loans grow from about 4.8% of sales in Q4 2010 to 8.2% in Q1 2012. The industry average is about 6%. [Investor’s Business Daily, July 27]

Should taxpayers be concerned? Probably:

In a note to investors Tuesday, Moody’s warned that the subprime auto lending market is seeing the same kind of heated competition and poor underwriting that drove unexpectedly high losses in the mid-1990s. Moody’s said loan performance has been strong over the past few years, but lenders should beware of weakening standards in order to increase profits and market share. [Dee-Ann Durbin, AP, July 24, via Hogberg, Investor’s Business Daily, August 2]

Posted on 08/02/12 07:18 PM by Alex Adrianson

Property Rights Are Part of Liberty, Too

Some gun rights proponents are forgetting about property rights. That’s in the Constitution, too, by the way.

As Roger Pilon notes, the National Rifle Association has launched a $75,000 ad campaign against a Tennessee state representative for opposing a bill that would have required employers to let employees keep guns in their cars while parked in their employers’ private parking lots. Contrary to the NRA, there’s no Second Amendment violation when a private property owner decides to forbid others to carry guns on his property. Pilon explains: “The Second Amendment prevents the government, not private parties, from infringing your right to keep and bear arms. If a private party can ban you from his property for any reason, good or bad, he can do so for carrying a gun.” [Cato-at-Liberty, July 31]

And if the government can force you to let someone carry guns on your property, what can’t it require you to do with your property? If you don’t want to be in a place that requires you to disarm, then don’t go to that place.

Posted on 08/02/12 03:06 PM by Alex Adrianson

Teachers Union Plays Rough to Deny Students Choice

In Louisiana, the teachers union is trying to shut down the state’s new school choice program via intimidation. Not happy with letting its lawsuit over the program play out in court, the Louisiana Association of Educators last week sent letters to 95 private schools warning them they will face lawsuits if they accept state money under the program.

The program, the Student Scholarships for Educational Excellence, provides low-income students in failing public schools vouchers to attend a private school of their choice. As Michael Q. McShane points out, if the union were to win the case, those students would be forced in the middle of the school year to go back to the public schools they were trying to flee—a public relations nightmare for the union. [National Review Online, July 31]

We’ll go out on a limb and say they’re probably not making themselves seem any less the bully now. The letters, sent by the law firm Blackwell & Associates, informed the schools that they will face a lawsuit unless they sign, by Friday, July 27, a form letter to the State Superintendent of Education declining to accept public monies under the program.

Posted on 08/01/12 03:23 PM by Alex Adrianson

Heritage FoundationInsiderOnline is a product of The Heritage Foundation.
214 Massachusetts Avenue NE | Washington DC 20002-4999
ph 202.546.4400 | fax 202.546.8328
© 1995 - 2014 The Heritage Foundation