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.
August 24, 2012
Latest Studies: 42 new items, including an Empire Center report on the graying of New York, and a report from the National Center for Policy Analysis on the Los Angeles’ bag ban
Notes on the Week: Bag bans kill, redistribution fail, school choice and college attendance, and more
To Do: New Heritage Mobile App, Resource for Teachers
Budget & Taxation
• Scott Walker, Union Slayer – Capital Research Center
• How Did Federal Surpluses Become Huge Deficits? (Hint: It Wasn’t Because of Tax Cuts for the Rich) – Economics 21
• CBO Budget Update: Historic Deficits Continue, Recession Threatens in 2013 – The Heritage Foundation
• Tax Extenders Bill a Good Start—Except for the Tax Increase – The Heritage Foundation
• Pension Debt More than Doubles Under New Rules – Illinois Policy Institute
• The U.S. Tax System: Who Really Pays? – Manhattan Institute
• Monopoly Workers’ Compensation Program Set to Impose Massive Payroll Tax Increase – Washington Policy Center
Crime, Justice & the Law
• The Mysterious Disappearance of International Law Arguments from Juvenile Sentencing in Miller v. Alabama – The Heritage Foundation
• Invisible Threats – Hoover Institution
• Torture by Tort – Hoover Institution
• Ruling on Common Law in Trade Secret Disputes May Expand Trade Commission Caseload – Washington Legal Foundation
Economic and Political Thought
• The Origins and Revival of Constitutional Conservatism: 1912 and 2012 – The Heritage Foundation
• What Is the Role of the People? – The Heritage Foundation
• The Other War on Poverty – National Affairs
Economic Growth
• Europe’s Hope: Entrepreneurs – American Enterprise Institute
• The Graying of the Empire State – Empire Center for New York State Policy
Education
• Solving America’s Mathematics Education Problem – American Enterprise Institute
• The Effects of School Vouchers on College Enrollment: Experimental Evidence from New York City – Brookings Institution
• The Profit Motive in Education: Continuing the Revolution – Institute of Economic Affairs
Family, Culture & Community
• An Unintended Catastrophe – American Enterprise Institute
• Clarify U.S. Policy on Afghanistan: Designate Haqqani Network Terrorists – The Heritage Foundation
• Going the Extra Mile for a Strategic U.S.–India Relationship – The Heritage Foundation
• U.S. Should Insist Egypt’s Military Buildup Must Comply with Peace Treaty – The Heritage Foundation
• Hearts and Minds: Counting the Costs – Hoover Institution
Government Reform
• Ethiopia Post-Meles: Washington Should Encourage Reforms – The Heritage Foundation
• Somalia’s Government Transition Maintains the Status Quo – The Heritage Foundation
• “Give Up Sovereignty!” – Hoover Institution
Information Technology
• Regulatory Forbearance and the Rule of Law: The FCC’s Arbitrary and Capricious Obstruction of Deregulation – Free State Foundation
International Trade/Finance
• Taiwan and East Asian Regionalism – American Enterprise Institute
Labor
• The Dead End of “Disparate Impact” – National Affairs
• California Court Enforces Contract Requiring Individualized Arbitration – Washington Legal Foundation
Monetary Policy/Financial Regulation
• The Uses of LIBOR and the Victims of Its Manipulation: A Primer – American Enterprise Institute
Natural Resources, Energy, Environment, & Science
• Presidential Power: Obama vs. Romney on Energy – American Enterprise Institute
• Subsidy-Powered Vehicles – American Enterprise Institute
• A Carbon Tax Would Harm U.S. Competitiveness and Low-Income Americans Without Helping the Environment – The Heritage Foundation
• Hard Facts: An Energy Primer – Institute for Energy Research
• A Survey on the Economic Effects of Los Angeles County’s Plastic Bag Ban – National Center for Policy Analysis
Philanthropy
• Americans United for Change – Capital Research Center
• Rallying the Catholic Left – Capital Research Center
Regulation & Deregulation
• Inflated Benefits in Agencies' Economic Analysis – Mercatus Center
• Defeating “Prior Substantiation” Advertising Claims Under State Consumer Protection Laws – Washington Legal Foundation
The Constitution/Civil Liberties
• Free Speech for Me, But Not for Thee, PC? – American Enterprise Institute
• The Court that Couldn’t Say “Stop!” – Hoover Institution
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]
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]
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]
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]
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.
The study is “The Effects of School Choice Vouchers on College Enrollment: Experimental Evidence from New York City” [Brookings Institution, August 2012].
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]
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.
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]
• 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 Fagen 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.
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