Updated daily, InsiderOnline (insideronline.org) is a compilation of publication abstracts, how-to essays, events, news, and analysis from around the conservative movement. The current edition of The INSIDER quarterly magazine is also on the site.
June 1, 2012
Notes on the Week: May jobs report is not good, most in the individual market won’t be able to keep their insurance, Walker’s reforms more than fair to Wisconsin government workers, and more
To Do: Food Denial Edition
Latest Studies: 45 new items, including The Higher Education Bubble from Encounter Books, and a Mercatus Center report on how TV content regulations hurt consumers
FOOD BANS DON’T WORK: “Reducing people’s options for junk foods gets them to cut back on the amount of calories they take in from junk food, but it doesn’t help them to lose weight, according to a new study.
“‘Limiting variety was helpful for reducing intake for that type of food group, but it appeared that compensation occurred in other parts of the diet,’ said Hollie Raynor, a professor at the University of Tennessee and the lead author of the study.
“In other words, people tend to make up for the fewer calories in the restricted food group by eating more calories from other types of foods.” [Kerry Grens, Reuters, May 31]
“Employers created just 69,000 jobs last month, the Labor Department said on Friday. That’s the fewest since May of last year. Economists had been expecting nonfarm payrolls to increase by 150,000. (In fact, the result was lower than what any economist polled by Reuters had predicted.)
“Moreover, companies added 49,000 fewer jobs than previously estimated in March and April. […]
“[T]he current 8.2% unemployment rate is 2.5 percentage points above where Team Obama predicted it would be right now if Congress passed his trillion-dollar stimulus plan.” [James Pethokoukis, The American, June 1]
8.2 PERCENT UNEMPLOYMENT IS ONLY PART OF THE BAD NEWS: “The unemployment rate rose slightly to 8.2% in May, holding above 8% for the 40th straight month, the Labor Department reported Friday. But actual employment rates of core working age Americans suggests the true jobs situation is even worse.
“From mid-1987 until the Great Recession, the employment-to-population ratio of 25-54-year-olds usually ranged from 78.5% to 80%. It never fell below 78.2% even during the 1990-1991 and 2001 slumps.
“But now, nearly three years after the recession ended in June 2009, that ratio stands at just 75.7%.” [David Hogberg, Investor’s Business Daily, June 1]
GOV. WALKER’S REFORMS HAVE NOT BEEN UNFAIR TO WISCONSIN’S PUBLIC EMPLOYEES: “State and local government employees receive salaries roughly equal to those paid to private sector Wisconsin employees with similar education and experience or working in jobs with similar skill requirements. However, even following Act 10, pension benefits for Wisconsin public employees are roughly 4.5 times more valuable than private sector levels while health benefits are about twice as generous as those paid by larger private sector Wisconsin employers. This difference results in a combined salary-benefits compensation premium of around 22 percent for state workers over private sector workers, with varying but often larger pay advantages for local government employees.” [Andrew Biggs and Jason Richwine, American Enterprise Institute, May 29]
THE TROUBLED ASSET RELIEF PROGRAM WAS SUPPOSED TO BE TEMPORARY: WHAT HAPPENS TO THOSE CLAIMS OF OBAMA’S FRUGALITY WHEN YOU DON’T COUNT BAILOUTS?
“It turns out that Obama’s supposed frugality is largely the result of how [the Troubled Asset Relief Program] is measured in the federal budget. To put it simply, TARP pushed spending up in Bush’s final fiscal year (FY2009, which began October 1, 2008) and then repayments from the banks (which count as ‘negative spending’) artificially reduced spending in subsequent years.” [Daniel J. Mitchell, Cato-at-Liberty, May 29]
GOVERNMENT PLAYS BY DIFFERENT RULES: THERE WON’T BE FOOD AND DRUG ADMINISTRATION OVERSIGHT OF THE AGENCY THAT PROMOTES COMPARATIVE EFFECTIVENESS RESEARCH: “If you’ve spent a billion dollars on a new drug, you have an interest in touting it as vastly better than the drug that preceded it. But if you have an interest in saving a billion dollars — and the U.S. government, as the world’s largest payer for health care, most certainly has such an interest — then surely you have a corresponding incentive to recommend cheaper treatments. […]
“There is always a trade-off between care and cost, but that trade-off keeps changing as medicine advances. What’s crazy expensive today could be far cheaper in five years’ time, and it could trigger further incremental breakthroughs in treatment.
“A glance at the [Agency for Healthcare Research and Quality]’s link-heavy website shows that a lot of its reports are already old, while the billion dollars it got from Congress has yet to deliver any major new findings. This isn’t particularly surprising: Comparative effectiveness research takes time. But what if the eventual results end up being out of date — or get challenged as critically flawed? What will a government ‘comparative effectiveness’ health rep say in such cases?
“Again, we don’t know, because the government doesn’t think it needs to regulate itself as a provider of health care research and purchaser of health care.” [Trevor Butterworth, The Daily, May 29]
COMPETITIVE FEDERALISM AT WORK: “Maryland accounted for the largest taxpayer exodus of any state in the region between 2007 and 2010, with a net migration resulting in 31,000 residents having left the state. Where did most of them go? Virginia. Virginia is now home to nearly 11,500 former Marylanders—a shift of $390 million from the tax rolls of one state to another, according to the non-partisan Tax Foundation.
“That’s the position Maryland finds itself in after six years of damaging tax increases. Since 2007, taxes and fees have been raised 24 times, taking an additional $2.4 billion out of the economy each year. That explains why two states with similar economies, demographics, and a shared dependence on federal government employment and procurement sharply diverge in job growth. Maryland’s unemployment rate is a full point higher than Virginia’s and just last month the state led the nation in job loss, according to the Labor Department’s April numbers.” [Larry Hogan, Reason, May 30]
MORE THAN HALF OF INDIVIDUAL BUYERS WILL NEED PRICIER HEALTH INSURANCE, THANKS TO OBAMACARE REGULATIONS: “[T]he majority of Americans with individual insurance coverage today are enrolled in a plan whose actuarial value is too low to qualify for a state-based exchange. Insurance reforms that went into effect September 23, 2010, raised the financial protection offered by exchange plans. For example, lifetime maximum benefits were eliminated, effective preventive services must now be offered without cost sharing, and annual limits on insurance coverage were removed. But to qualify for exchanges, insurers will need to lower the average deductible level for individual tin plans, which today average nearly $3,900 for a single person.” [Jon R. Gabel, et al., Health Affairs, May 2012]
ECONOMIES GROW FASTER WHEN GOVERNMENT IS SMALLER: “Econometric analysis of advanced [Organisation for Economic Cooperation and Development] countries for the period 1965-2010 finds that a higher tax to [Gross Domestic Product] ratio has a statistically significant, negative effect on growth. For example, an increase in the tax to GDP ratio of 10 percentage points is found to lower annual per capita GDP growth by 1.2 percentage points. […]
“Between 2003 and 2012, real GDP growth was 3.1% a year for small government countries (i.e. where both government outlays and receipts were on average below 40% of GDP for the years 1999 to 2009), compared to 2.0% for big government countries.
“There is little evidence that small government countries have worse social outcomes: Health outcomes are mixed: in the past 10 years, life expectancy in small government countries has been higher than in big government countries. Infant mortality has been lower in big government countries. Statistical evidence from the last 10 years suggests that small government countries achieve higher academic outcomes.” [Ryan Bourne and Thomas Oechsle, “Small Is Best: Lessons from Advanced Economies,” Centre for Policy Studies, May 2012]
CUTTING GOVERNMENT SPENDING HASN’T LED TO THE DOOM PREDICTED BY KEYNESIANS:
“The green regression line highlights the most important takeaway from this chart: that there is no obvious relationship between a decrease in government spending and a decrease in GDP. Keynesians would expect the line to slope upward; in fact, it slopes slightly downward. But the slope of the line is not significantly different from zero […] .
“The chart has two policy implications. First, austerity has not caused even near-term harm to countries that have undertaken it. Second, austerity is something of a free lunch. This is because, as studies (such as a 2010 paper by economists Andreas Bergh and Martin Karlsson) show, longer-run growth is higher in countries with smaller governments. Nations that reduce spending today can do so without fearing that the longer-run growth is being purchased with a costly near-term recession.” [Kevin A. Hassett, American Enterprise Institute, May 25]
Also on the blog this week: bad public pension accounting • UK Tax Freedom Day • licensure v. free speech • Medicare actuaries v. trustees • the business view • economic freedom and tolerance
• Go ahead, eat a donut. After all, it’s not “Mayor Bloomberg Tell Me What to Eat” Day. It’s National Donut Day.
• Get your fix for news on the war on consumer freedom: The Washington Legal Foundation has a new site that tracks it all: EatingAwayYourFreedoms.org.
• Nominate someone for a Walter Duranty Prize for Journalistic Mendacity. PJ Media and The New Criterion are now accepting nominations for the most dishonest reporting for fiscal year 2011-2012 (July 1, 2011-June 30, 2012). This prize is named after Walter Duranty, the New York Times Moscow correspondent who won a Pulitzer Prize in 1932 for a series of articles that whitewashed Soviet brutality and the state-engineered famine in the Ukraine.
• Find out how liberal you are: Take the Cliché Quiz, based on Jonah Goldberg’s new book, The Tyranny of Cliches: How Liberals Cheat in the War of Ideas.
Budget & Taxation
• Field of Schemes The Taxpayer and Economic Welfare Costs of Shallow-Loss Farming Programs – American Enterprise Institute
• The Impact of Act 10 on Public Sector Compensation in Wisconsin – American Enterprise Institute
• Analyzing Nashville’s “Taxing” Budget – Beacon Center of Tennessee
• We Can Cut Government: Canada Did – Cato Institute
• Wisconsin’s Act 10: A Partial Fix for the State Budget Deficit – Heartland Institute
• The Real Cost of Public Pensions – The Heritage Foundation
• Understanding Public Pension Costs: The Example of Wisconsin – The Heritage Foundation
• Austerity By the Numbers – Mercatus Center
• Not in Kansas Anymore: Income Taxes on Pass-Through Businesses Eliminated – Tax Foundation
• State Tax Changes During 2011 – Tax Foundation
• The Single Income Tax – TaxPayers’ Alliance
• Tax Restructuring in Virginia: A Revenue Neutral Path for Improving Our Economy – Thomas Jefferson Institute for Public Policy
Economic and Political Thought
• The Handwriting on the Wall – National Affairs
• The Politics of Loss – National Affairs
Economic Growth
• Friending Business – American Enterprise Institute
• A Capitalism for the People: Recapturing the Lost Genius of American Prosperity – Basic Books
• Small Is Best: Lessons from Advanced Economies – Centre for Policy Studies
Education
• School Choice Toolkit – Commonwealth Foundation for Public Policy Alternatives
• Great Teaching – Education Next
• The Higher Education Bubble – Encounter Books
• Unchartered Territory: Downstate and Suburban Families Lack School Alternatives – Illinois Policy Institute
• Gratitude for Our Armed Forces Should Not Stop at the Schoolhouse Door: Providing Educational Choice through Military Education Savings Accounts – Independent Women’s Forum
• Better Schools, Fewer Dollars – Manhattan Institute
• A Changing Bureaucracy: The History of the Massachusetts Department of Elementary and Secondary Education – Pioneer Institute for Public Policy Research
• Higher Education in New Mexico: A Chicken in Every Pot, a Car in Every Garage, a College on Every Corner – Rio Grande Foundation
• Teacher Effectiveness in Texas – Texas Public Policy Foundation
• Online Learning in the Five Largest School Districts in Washington State – Washington Policy Center
Foreign Policy/International Affairs
• To-Do List for Hillary Clinton’s Upcoming Trip to the Caucasus and Turkey – The Heritage Foundation
Government Reform
• Redistricting Wars – Manhattan Institute
• When Government Privileges Trump the Rights of Citizens – Reason Foundation
Health Care
• Rescuing Medicaid: How Illinois Can Reform Medicaid Without Rate Cuts and Tax Hikes – Illinois Policy Institute
Labor
• The Dangerous Impact of Barring Criminal Background Checks: Congress Needs to Overrule the EEOC’s New Employment “Guidelines” – The Heritage Foundation
Monetary Policy/Financial Regulation
• China Drowning in Money: What It Means for the U.S. – The Heritage Foundation
National Security
• Protecting the American Dream – The Heritage Foundation
Natural Resources, Energy, Environment, & Science
• President Obama’s Some-of-the-Above Energy Policy – American Enterprise Institute
• Ten Actions Congress Can Take to Lower Gas Prices – The Heritage Foundation
• Is There Still a Case for Coal? – Manhattan Institute
• Future of EPA’s Audit Program Remains Regretfully Uncertain – Washington Legal Foundation
Regulation & Deregulation
• Consumer Welfare and TV Program Regulation – Mercatus Center
• FDA on Premises: Photography and the Protection of Trade Secrets – Washington Legal Foundation
• Ready for Primetime? FDA's Proposed Guidance on Pre-Screening of DTC TV Drug Ads – Washington Legal Foundation
The Constitution/Civil Liberties
• A Brief History of Checkpoints (And What to do About Them) – Independent Institute
Transportation/Infrastructure
• Anticipating the World’s Most Expensive Natural Disaster – American Enterprise Institute
Welfare
• The Dependency Agenda – Encounter Books
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